Macroeconomics

2.

Measuring a Nation's Economy

2.1.

Gross Domestic Product

2.1.1.

Definition and Components

2.1.1.1.

Final Goods and Services

2.1.1.2.

Value Added Approach

2.1.1.3.

Production Boundaries

2.1.2.

The Expenditure Approach

2.1.2.1.

2.1.2.1.1.

2.1.2.1.2.

Nondurable Goods

2.1.2.1.3.

2.1.2.1.4.

Consumption Function

2.1.2.2.

2.1.2.2.1.

Business Fixed Investment

2.1.2.2.2.

Residential Investment

2.1.2.2.3.

Inventory Investment

2.1.2.2.4.

Gross vs Net Investment

2.1.2.3.

Government Purchases

2.1.2.3.1.

Federal Spending

2.1.2.3.2.

State and Local Spending

2.1.2.3.3.

2.1.2.4.

2.1.2.4.1.

2.1.2.4.2.

2.1.2.4.3.

2.1.3.

The Income Approach

2.1.3.1.

Wages and Salaries

2.1.3.2.

2.1.3.3.

2.1.3.4.

2.1.3.5.

2.1.3.5.1.

2.1.3.5.2.

2.1.3.5.3.

Statistical Discrepancy

2.1.4.

The Production Approach

2.1.4.1.

Value Added by Industry

2.1.4.2.

Sectoral Contributions

2.1.4.3.

2.1.4.4.

Secondary Sector

2.1.4.5.

Tertiary Sector

2.1.5.

Real vs Nominal GDP

2.1.5.1.

Calculating Real GDP

2.1.5.2.

Calculating Nominal GDP

2.1.5.3.

Base Year Selection

2.1.5.4.

Chain-Weighted Measures

2.1.6.

The GDP Deflator

2.1.6.1.

Definition and Calculation

2.1.6.2.

Comparison with CPI

2.1.6.3.

Implicit Price Deflator

2.1.7.

GDP as a Measure of Economic Well-being

2.1.7.1.

Standard of Living

2.1.7.2.

Cross-Country Comparisons

2.1.7.3.

Per Capita Measures

2.1.8.

Limitations of GDP

2.1.8.1.

Nonmarket Activities

2.1.8.2.

Underground Economy

2.1.8.3.

Environmental Quality

2.1.8.4.

Distribution of Income

2.1.8.5.

Quality of Life Factors

2.2.

Alternative Measures of National Income

2.2.1.

Gross National Product

2.2.1.1.

Relationship to GDP

2.2.2.

Net Domestic Product

2.2.2.1.

Depreciation Adjustments

2.2.3.

National Income

2.2.3.1.

Factor Payments

2.2.4.

Personal Income

2.2.4.1.

Adjustments from National Income

2.2.5.

Disposable Personal Income

2.2.5.1.

After-Tax Income

2.3.

Measuring the Cost of Living

2.3.1.

The Consumer Price Index

2.3.1.1.

Definition and Purpose

2.3.1.2.

Calculating the CPI

2.3.1.2.1.

Fixing the Basket

2.3.1.2.2.

Finding the Prices

2.3.1.2.3.

Computing the Basket's Cost

2.3.1.2.4.

Choosing a Base Year

2.3.1.2.5.

Computing the Index

2.3.1.2.6.

Calculating Inflation Rate

2.3.1.3.

Problems in Measuring Cost of Living

2.3.1.3.1.

Substitution Bias

2.3.1.3.2.

Introduction of New Goods

2.3.1.3.3.

Unmeasured Quality Change

2.3.1.3.4.

2.3.2.

Other Price Indices

2.3.2.1.

Producer Price Index

2.3.2.2.

2.3.2.3.

Personal Consumption Expenditures Price Index

2.3.3.

CPI vs GDP Deflator

2.3.3.1.

Coverage Differences

2.3.3.2.

Weighting Schemes

2.3.3.3.

Uses and Limitations

2.3.4.

Correcting Economic Variables for Inflation

2.3.4.1.

2.3.4.1.1.

Cost-of-Living Adjustments

2.3.4.1.2.

Indexed Contracts

2.3.4.1.3.

Social Security Adjustments

2.3.4.2.

Real vs Nominal Interest Rates

2.3.4.2.1.

Calculating Real Interest Rate

2.3.4.2.2.

Fisher Equation

2.3.4.2.3.

Ex Ante vs Ex Post Real Rates

2.4.

Measuring Unemployment

2.4.1.

Defining and Measuring Unemployment

2.4.1.1.

The Labor Force

2.4.1.1.1.

2.4.1.1.2.

2.4.1.1.3.

Not in the Labor Force

2.4.1.1.4.

Working Age Population

2.4.1.2.

The Unemployment Rate

2.4.1.2.1.

2.4.1.2.2.

2.4.1.2.3.

Seasonal Adjustments

2.4.1.3.

The Labor-Force Participation Rate

2.4.1.3.1.

2.4.1.3.2.

Trends and Implications

2.4.1.3.3.

Demographic Factors

2.4.2.

Types of Unemployment

2.4.2.1.

Frictional Unemployment

2.4.2.1.1.

2.4.2.1.2.

Information Asymmetries

2.4.2.1.3.

Policy Responses

2.4.2.2.

Structural Unemployment

2.4.2.2.1.

Skills Mismatch

2.4.2.2.2.

Technological Change

2.4.2.2.3.

Geographic Mismatch

2.4.2.2.4.

Policy Responses

2.4.2.3.

Cyclical Unemployment

2.4.2.3.1.

Business Cycle Relationship

2.4.2.3.2.

Demand Deficiency

2.4.3.

The Natural Rate of Unemployment

2.4.3.1.

2.4.3.2.

2.4.3.3.

Structural Factors

2.4.4.

Alternative Unemployment Measures

2.4.4.1.

Underemployment

2.4.4.2.

Discouraged Workers

2.4.4.3.

Marginally Attached Workers

2.4.4.4.

Part-Time for Economic Reasons

2.4.5.

Limitations of the Unemployment Rate

2.4.5.1.

Hidden Unemployment

2.4.5.2.

Quality of Employment

2.4.5.3.

Duration of Unemployment

Previous

1. Introduction to Macroeconomics

Go to top

Next

3. The Real Economy in the Long Run