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Macro 5

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Gale Pooley
Gale Pooley

Macro 5

Economy & Finance
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Lecture 5 Macroeconomics
912,000 people
Independence 1970
Quiz 4: Sec___ Name________ 1. What is an invention? 2. What is an innovation? 3. What percent of inventions become innovations?
GDP Gross Domestic Product The market value of all final goods and services produced in a country in a given time
GDP How much stuff a country makes
GDP per Capita GDP per Person Average GDP
MarketValue What something would sell for
MarketValue One Apple plus One Orange = Three Dollars
All Everything except... Stuff you don’t sell
Final Intermediate Final
Final Intermediate
Goods and Services
Goods Services
Produced New Stuff Does not include the sale of used goods
Within a Country
In a given period of time Year Y/Y Quarter Q/Q Annualized: Q x 4
Percentage Change new number - old number old number
ThisYear - LastYear LastYear ThisYear = 75 LastYear = 60 Percentage Change?
75 - 60 60 15 60 .25 or 25%
How do you calculate GDP?
GDP = C = Consumption I = Investment G = Government X = Exports M = Imports
GDP = C + I + G + (X - M)
Consumption Spending by households on goods and services, except new housing
Investment Spending on capital equipment, inventories, and structures, including new housing
Government Spending on goods and services from local, state, and federal governments.
Net Exports Exports minus imports
Net Exports Foreigners buying exports minus domestic residents buying foreign goods
What is GDP? C = 105 I = 40 G = 25 X = 30 M = 20
GDP = C + I + G + (X - M) = 105 + 40 + 25 +(30-20) = 105 + 40 + 25 +10 = 180
GDP GDP per Capita
GDP $85 trillion Population 7.6 billion GDP Per Capita $11,182 Per Day $30.64
GDP $18.5 trillion Population 323 million GDP Per Capita $57,275 United States Per Day $157
GDP $11 trillion Population 1.4 billion GDP Per Capita $7,857 Per Day $21 China
activated their entrepreneurs
https://fred.stlouisfed.org Public Data Explorer
Macro 5

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