Macro 6

2. Lecture 6
Macroeconomics

3. Quiz 5: Sec__ Name__________
1. What is the name of your country?
2. What is the GDP of your country?
3. What is the population of your country?
4. What is the GDP per Capita of your
country?

4. https://fred.stlouisfed.org
Public Data Explorer

6. Econ Movie
Wed. Sept. 25th
Room HGB 135
7:00pm
Bonus
Opportunity

7. Nominal
vs.
Real

9. When you have lines waiting to buy your
product, you can do two things:
make more, or raise prices

12. Money Prices
Current or Nominal
Constant or Real

13. Inflation
Cause:
Printing money faster than
making goods
Effect:
Rising prices

14. Nominal
Current prices
Current quantity

15. Real
will always have
a base year

16. Real
Constant prices
Current quantity

17. Pizza Soda
Year Price Qty Total Price Qty Total
Total
Total
%
Change
2010 $5 100 $500 $1.00 50 $50 $550
2011 $6 134 $804 $1.50 40 $60 $864 57.1%
2011* $5 134 $670 $1.00 40 $40 $710 29.1%
2012 $10 150 $1500 $2.00 30 $60 $1,560 80.6%
2012* $5 150 $750 $1.00 30 $30 $780 9.9%
* Prices adjusted to 2010 Rates
Real versus Nominal GDP

18. GDP Deflator
Nominal GDP
Real GDP= x 100

19. GDP Deflator
$1,560
$780= x 100
= 200 Prices have
doubled

20. If the the GDP Deflator is
178 and a Pizza cost $15,
what was the price in the
base year?
$15 ÷ 1.78 = $8.43

21. GDP Inflation Rate
GDP DeflatorYear 2 - GDP DeflatorYear 1
GDP DeflatorYear 1= x 100

22. If the the GDP Deflator is
178 in 2010 and 192 in 2011,
what was the rate of
inflation?
192-178
178
x 100 =7.86%

23. Year Nominal Real
GDP
Deflator
2010 550 550
2011 864 710
2012 1560 780
GDP Deflator = (Nominal ÷ Real ) x 100

24. Problems with GDP
Inequality
Types of Goods and Services
Happiness
Others?

25. Chapter 7
Wealth of
Nations

26. Rule of 70s
Years to Double
=
70 ÷ growth rate

27. Philippines
2019 - $3,000
7%
30 years?

29. Savers ,
Lenders,
Investors
Borrowers
Money
Market
Interest
Rate
Quantity