Macroeconomics & Gross Domestic Product

What is microeconomics?

The study of small pieces within the larger macro economy

What is macroeconomics?

The study of the entire economy

What is the big idea?

Spending drives the economy

What is economic modeling?

Creating a simplified version of the real economy to help us understand how people make decisions

What do economic models need?

Description, explanation, predictions, and control

What is gross domestic product?

The dollar value of all final goods and services produced within a countries borders within a given year

What is national income accounting?

The government’s accounting system (GDP)

What is our government’s national income accouting?

gross domestic product

Does GDP have intermediate transactions?

No

How do you calculate GDP expenditures approach?

Add up all the spending that takes place in the US economy

Can GDP expenditures approach be negative?

Yes

How do you calculate GDP income approach?

Add up all the incomes earned from the sale and production of all final goods and services