637394
Description
Mind Map by adelinaarintha, updated more than 1 year ago
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Created by adelinaarintha
about 10 years ago
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Macro Economics
- Key Economic Indicators
- Healthy economy - 4 macro goals
- sustained economic growth
- actual
- GDP
- GDP = value of all final goods and services produced
within a given country during a given period of time
- methods of calculation
- product approach
- adding up the final value of everything produced in
the country during the year
- adding up the final value of everything produced in
the country during the year
- income approach
- adding up all the incomes for households in the form of wages, profits,
rent and interest, generated by the production of goods and services
- adding up all the incomes for households in the form of wages, profits,
rent and interest, generated by the production of goods and services
- expenditure approach
- adding up all expenditure on final output. = C + I + G + (X-M)
- adding up all expenditure on final output. = C + I + G + (X-M)
- must always give the same answer
- fundamental identity of national income accounting :
national product = national income = national expenditure
- fundamental identity of national income accounting :
national product = national income = national expenditure
- product approach
- uses
- measure economic growth
- gauge economic strength of different countries
- determine contribution from various
sectors of economy
- show distribution of income between wage,rent,interest and profit
- guide for formulation policies
- measure economic growth
- limitations
- in accurately measuring national output
- in measuring standard of living
- in comparing countries
- in accurately measuring national output
- GDP = value of all final goods and services produced
within a given country during a given period of time
- GDP
- potential
- an increase in the production capacity of the economy
- an increase in the production capacity of the economy
- actual
- low inflation
- inflation = a situation where there is a sustained increase in the general price level
- % rate of increase in the CPI/period
- keep price stable - aid the process of economic decision making
- inflation = a situation where there is a sustained increase in the general price level
- low unemployment
- unemployment of labour = situation where
people who are available for work and are
actively seeking for work cannot find jobs
- unemployment rate
- unemployment of labour = situation where
people who are available for work and are
actively seeking for work cannot find jobs
- sustainable balance of payments
- BOP = record of a country's international
transactions, i.e. between its residents and the
rest of the world
- BOP = record of a country's international
transactions, i.e. between its residents and the
rest of the world
- sustained economic growth
- The circular flow of income
- Healthy economy - 4 macro goals
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