Macroeconomics

3 economic goals + how they are measured

1. Keep economy growing - GDP (growth of economy)

2. Limit unemployment - Unemployment Rate (unemployment)

3. Keep prices stable - Inflation Rate (prices)

GDP

All final goods and services produced within a country during a specific period of time (usually one year)

Not counted in GDP:

• Buying second hand product (used good)

• Buying stocks

• Company buys another company

• Non-traditional (household productivity, bartering goods & services, illegal activity)

4 components

• Consumer spending

• Business spending

• Government spending

• Net exports (spending by other countries)