曼昆宏观经济学英文版23measuring-nation.pptVIP

23 Measuring a Nation’s Income Measuring a Nation’s Income Microeconomics Microeconomics is the study of how individual households and firms make decisions and how they interact with one another in markets. Macroeconomics Macroeconomics is the study of the economy as a whole. Its goal is to explain the economic changes that affect many households, firms, and markets at once. Measuring a Nation’s Income Macroeconomics answers questions like the following: Why is average income high in some countries and low in others? Why do prices rise rapidly in some time periods while they are more stable in others? Why do production and employment expand in some years and contract in others? THE ECONOMY’S INCOME AND EXPENDITURE When judging whether the economy is doing well or poorly, it is natural to look at the total income that everyone in the economy is earning. THE ECONOMY’S INCOME AND EXPENDITURE For an economy as a whole, income must equal expenditure because: Every transaction has a buyer and a seller. Every dollar of spending by some buyer is a dollar of income for some seller. THE MEASUREMENT OF GROSS DOMESTIC PRODUCT Gross domestic product (GDP) is a measure of the income and expenditures of an economy. It is the total market value of all final goods and services produced within a country in a given period of time. THE MEASUREMENT OF GROSS DOMESTIC PRODUCT The equality of income and expenditure can be illustrated with the circular-flow diagram. Figure 1 The Circular-Flow Diagram THE MEASUREMENT OF GROSS DOMESTIC PRODUCT GDP is the market value of all final goods and services produced within a country in a given period of time. THE MEASUREMENT OF GROSS DOMESTIC PRODUCT “GDP is the Market Value . . .” Output is valued at market prices. “. . . Of All Final . . .” It records only the value of final goods, not intermediate goods (the value is counted only once). “. . . Goods and Services . . . “ It includes both tangible goods (food, clothing, cars) and intangible serv