EC140 Chapter Notes - Chapter 19: Gross Domestic Product, Output Gap, Potential Output
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EC140 Full Course Notes
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Key macroeconomic variables: various key macroeconomic variables are, output and income. The most comprehensive measure of a nation"s overall level of economic activity is the value of its total production of goods and services called national product (output) The value of national product is equal to the value of national income. National income: refers to both the value of total output and the value of the income claims generated by the production of that output: national income: aggregation. To measure national income we add the values of the many different goods and services produced. Multiply the number of units produced at the price of each unit that is sold. When we sum the values across the different goods and services produced giving the quantity of total output or national income measured in dollars also referred to as nominal national income. To determine the extent to which change is due to quantity or prices economists calculate real national income.