Macroeconomics
Chapter 2: Measurement of Economic Performance Overview
This chapter introduces the world of national income accounting by providing the tools to analyze and understand a nation’s economic performance. It uses the circular flowmodelto illustrate how money and products move between different economic agents such as households, frms, governments, and foreign sectors.Thenthestageformeasuringthesizeof an economy using the gross domestic product (GDP).
This chapter also delves into understanding economic fluctuations through two crucial indicators: inflation and unemployment. Learning Objectives
By the end of this chapter, you should be able to:
● Understand how economic activity is measured through national income accounting. ● Understand how money and products move in an economy using the circular flow model. ● Defne and calculate GDP using different approaches. ● Defne, calculate, and analyze inflation and unemployment as indicators of economic performance. ● Distinguish nominal from real economic values. A. Introduction to Economic Performance
A fundamental question that often arises in economics pertains to the relationshipbetweena nation'seconomicactivity andthe well-beingof itsindividuals .Specifcally,doestheoverallriseinacountry'seconomic activity,accompaniedbyan increasedcapacityforpeopletopurchase goods and services , translate into greater happiness among its citizens?Thisquerylooksintotheintricateinterplaybetweeneconomic indicators and the subjective experience of well-being. To addressthis question,economistsmustnavigatethechallengeofmeasuringboththe intangible concept of "happiness" and the quantifable metrics of a nation's economic performance. In this exploration, we will delve into
45
© 2024 ACHIEVE ULTIMATE CREDIT-BY-EXAM GUIDE|MACROECONOMICS
Made with FlippingBook - Online Brochure Maker