宏观经济学ch02.pptVIP

Learning objectives In this chapter, you will learn about: Gross Domestic Product (GDP) the Consumer Price Index (CPI) the Unemployment Rate Gross Domestic Product Two definitions: Total expenditure on domestically-produced final goods and services Total income earned by domestically-located factors of production Why expenditure = income The Circular Flow Value added definition: A firm’s value added is the value of its output  minus the value of the intermediate goods the firm used to produce that output. Exercise: A farmer grows a bushel of wheat and sells it to a miller for $1.00. The miller turns the wheat into flour and sells it to a baker for $3.00. The baker uses the flour to make a loaf of bread and sells it to an engineer for $6.00. The engineer eats the bread. Compute value added at each stage of production GDP Final goods, value added, and GDP GDP = value of final goods produced = sum of value added at all stages of production The value of the final goods already includes the value of the intermediate goods, so including intermediate goods in GDP would be double-counting. The expenditure components of GDP consumption investment government spending net exports Consumption (C) durable goods last a long time ex: cars, home appliances non-durable goodslast a short time ex: food, clothing serviceswork done for consumers ex: dry cleaning, air travel. U.S. Consumption, 2001 Investment (I) def1: spending on [the factor of production] capital. def2: spending on goods bought for future use. Includes: business fixed investmentspending on plant and equipment that firms will use to produce other goods services residential fixed investmentspending on housing units by consumers and landlords inventory investmentthe change in the value of all firms’ inventories U.S. Investment, 2001 Investment vs. Capital Capital is one of the factors of production. At any given moment, the economy has a certain overall stock of cap