AP宏观经济学第二单元经济计量与经济目标知识点总结课件

MACROECONOMICS1Macroeconomics

is

the

study

of

the

large

econoas

a

whole.

It

is

the

study

of

the

big

pictureInstead

of

analyzing

one

consumer,

we

analyze

everyone.Instead

of

one

business

we

study

all

businesses.Why

study

the

whole

economy?

The

field

ofmacroeconomics

was

bornduringthe

Great

Depression.

Government

didn’t

understand

how

to

fix

adepressed

economy

with

25%

unemployment.Macro

was

created

to:Measure

the

health

of

the

whole

economy.Guide

government

policies

to

fix

problems2What

is

Macroeconomics?3Macro-Unit

2:Macroeconomics

MeasuresShu

YuWang4For

all

countries

there

are

three

majoeconomic

goals:Promote

Economic

GrowthLimit

UnemploymentKeep

Prices

Stable

(Limit

Inflation)In

this

unit

we

will

analyze

how

eachof

these

are

measured.Goal

#1PromoteEconomic

GrowthHow

does

a

country

measureeconomic

growth?56How

do

we

know

how

well

the

economy

is

doing?

Economists

collect

statistics

on

production,

incoinvestment,

and

savings.This

is

called

national

income

accounting.The

most

important

measureof

growth

is

GDP.Gross

Domestic

Product

(GDP)

is

the

dollar

value

of

allfinal

goods

and

services

produced

within

a

country’borders

in

one

year.Dollar

value-

GDP

is

measured

in

dollars.

Final

Goods-GDP

does

not

include

the

value

ofintermediate

goods.

Intermediate

goods

are

gooused

in

the

production

of

final

goods

and

servic

One

Year-GDP

measures

annual

economicperformance.Just

like

calculating

your

own

income,

GDP

measureshow

well

the

U.S.

is

doing

financially.How

do

you

use

GDP?Compare

to

previous

years

(Is

there

growth?)Compare

policy

changes

(Did

a

new

policy

work?)Compare

to

other

countries

(Are

we

better

off?)What

does

GDP

tell

us?*CIA

2007

Estimate7How

can

you

measure

growth

fromyear

to

year?%

Changein

GDP=Year

2

-Year

1Year

1X

100Mordor’s

GDP

in

2007

was

$4000Mordor’s

GDP

in

2008

was

$5000What

is

the

%

Change

in

GDP?Transylvania’s

GDP

in

2007

was

$2,000Transylvania’s

GDP

in

2008

was

$2,100What

is

the

%

Change

in

GDP?89Intermediate

GoodsNo

Multiple

Counting,

Only

FinalGoods

EX:

Price

of

finished

car,

not

theradio,

tire,

etc.Nonproduction

Transactions•Financial

Transactions

(nothing

produce•Ex:

Stocks,

bonds,

Real

estate•Used

Goods•Ex:

Old

cars,

used

clothesNon-Market

(Illegal)

Activities•Ex:

Illegal

drugs,

unpaid

workWhat

is

NOT

included

in

GDP?10Calculating

GDPTwo

Ways

of

calculating

GDP:Expenditures

Approach-Add

up

all

thespending

on

final

goods

and

servicesproduced

in

a

given

year.Income

Approach-Add

up

all

the

income

that

resultedfromselling

all

final

goodsservices

produced

in

a

given

year.Both

ways

generate

thesame

amount

sinceevery

dollar

spent

is

a

dollar

of

income.Four

components

of

GDP:Consumer

SpendingEx:

$5

Little

Caesar's

PizzaInvestments

-When

businesses

putmoneyback

into

their

own

business.Ex:

Machinery

or

toolsGovernment

SpendingEx:

Bombs

or

tanks,

NOT

social

securityNet

Exports

-Exports

(X)

–

Imports(M)Ex:

Value

of

3

Ford

Focuses

minus

2

HondasGDP

=

C

+

I

+

G

+

XnExpenditures

Approach1112Calculating

GDP13Included

or

not

Included

in

GDP?For

each

situation,

identify

if

it

is

includeGDP

the

identify

the

category

C,

I,

G,

or

Xn$10.00

for

movie

tickets$5M

Increase

in

defense

expenditures$45

for

used

economics

textbookFord

makes

new

$2M

factory$20K

Toyota

made

in

Mexico$10K

Profit

from

selling

stocks$15K

car

made

in

US,

sold

in

Canada$10K

Tuition

to

attend

college$120

Social

Security

payment

to

BobFarmer

purchases

new

$100K

tractor14GDP=$7,125,010$10.00

for

movie

tickets$5M

Increase

in

defense

expendituresX

$45

for

used

economics

textbook4.

Ford

makes

new

$2M

factoryX

$20K

Toyota

made

in

MexicoX

$10K

Profit

from

selling

stocks7.

$15K

car

made

in

US,

sold

in

Canada7.

$10K

Tuition

to

attend

collegeX

$120

Social

Security

payment

to

Bob10.Farmer

purchases

new

$100K

tractorIncluded

or

not

Included

in

GDP?Nominal

GDP

vs.Real

GDP15How

can

you

figure

out

which

is

the

most

popularmovie

of

all

time?What

is

the

problem

with

this

method?Nominal

Box

Office

Receipts16How

can

you

figure

out

which

is

the

most

popularmovie

of

all

time?Real

Box

Office

Receipts

(adjusted

for

inflatThe

Problem

with

GDPIf

a

country’s

GDP

increased

from

$4

Billion

to

$5Billion

in

one

year,

is

the

country

experiencingeconomic

growth?Did

the

country

definitely

produce

25%

moreproducts?What

is

Inflation?A

rising

general

level

of

pricesEX:

If

apples

are

the

only

thing

being

produceYear

1:

10

apples

at

$1

each;

GDP

=

$10Year

2:

10

apples

x

$1.25;

GDP

=

$12.50GDP

is

rising,

but

country

is

worse

off!1819Real

vs.

Nominal

GDPNominal

GDP

is

GDP

measured

in

current

pricesIt

does

not

account

for

inflationfrom

yearyear.Real

GDP

is

GDP

expressed

in

constant,

orunchanging,

dollars.Real

GDP

adjusts

for

inflation.REAL

GDP

IS

THE

BEST

MEASURE

OF

ECONOMIC

GROWTH!20Real

vs.

Nominal

GDP

Example200810

cars

at

$15,000

each

=

$150,00010

trucks

at

$20,000

each

=

$200,000Nominal

GDP

=

$350,000200910

cars

at

$16,000

each

=

$160,00010

trucks

at

$21,000

each=

$210,000Nominal

GDP

=

$370,000The

GDP

in

year2008

showsthe

dollar

value

of

all

finalgoods

produced.The

nominal

GDP

in

year

2009is

higher

which

suggests

thatthe

economy

is

improving.But

how

much

is

the

REALGDP?

How

do

you

get

it?Use

2008

Prices.The

Real

GDP

for

2009

is

thesame

as

2008

after

we

adjustfor

inflation.200910

cars

at

$15,000

each

=

$150,00010

trucks

at

$20,000

each=

$200,000REAL

GDP

=

$350,000Real

GDP

“deflates”

nominal

GDP

by

adjusting

forinflation

in

terms

of

a

base

year

prices.2122Does

GDP

accurately

measurestandard

of

living?Standard

of

living

(or

quality

of

life)

can

bemeasured,

in

part,

by

how

well

the

economy

isdoing…But

it

needs

to

be

adjusted

to

reflect

the

sizethe

nation’s

population.Real

GDP

per

capita

(per

person)

Real

GDP

per

capita

is

real

GDP

divided

by

thetotal

population.

It

identifies

on

average

how

mproducts

each

person

makes.Real

GDP

per

capita

is

the

best

measure

of

anation’s

standard

of

living.List

the

top

5

most

populated

countries23GDP

Per

Capita24Why

do

some

countries

have

higher

GDPs

than

others?Productivity

(TECHN)TechnologyEconomic

SystemExample#1:

Capitalist

countries

have

historically

had

moreeconomic

growth.––Capital

(like

robots)

can

produce

more

than

peopleCountries

with

more

capital,

can

produce

more

productsthan

countwithout

a

lot

of

capital.CapitalEx:

Capital

stock

is

machinery,

tools,

and

man-made

resourceExample#1:

India

has

over

a

billion

people

(human

resources)relativelyfew

capital

resources

and

therefore

a

lowethan

the

U.S.Example#2:

Japan

has

few

natural

resources

but

a

high

GDPHuman

Capital

(Knowledge)Natural

ResourcesEx:

Syria

has

a

lower

GDP

because

it

is

mostly

desert.THE

BUSINESSCYCLE26THE

BUSINESS

CYCLEThe

national

economy

fluctuates

resulting

in

periods

oboom

and

bust.Inflation

UnemploymentFullemploymentA

Recession

is

6

month

period

of

decline

in

output,

incoemployment,

and

trade.

(If

really

bad…then

depres2s728The

Business

CycleWhy

does

the

economy

fluctuate?•Retailerand

Producers

send

misleadinginformation

about

consumer

demand.•Advances

in

tech,

productivity,

or

resource•Outside

influences

(wars,

supply

shocks,

panic)Who

cares?Macroeconomics

measures

these

fluctuationsguides

policies

to

keep

the

economy

stable.The

government

has

the

responsibility

to:Promote

long-term

growth.Prevent

unemployment

(resulting

from

a

bust)Prevent

inflation

(resulting

form

a

boom).293031What

is

Economic

Growth?An

increase

in

real

GDP

over

timeAn

increase

in

real

GDP

per

capita

overtime

(usually

used

to

determine

standardliving)Why

is

economic

growth

the

goal

of

everysociety?Provides

better

goods

and

servicesIncreases

wages

and

standard

of

livingAllows

more

leisure

timeEconomy

can

better

meet

wantsGoal

#2Limit

Unemployment32The

Unemployment

rateThe

percent

of

people

in

the

labor

force

who

want

a

jobbut

are

not

working.Who

is

in

the

Labor

Force?Above

16

years

oldAble

and

willing

to

workNot

institutionalized

(jails,

hospitals)Not

in

military,

in

school

full

time,

or

reWhy

is

a

stay

at

home

mom

not

unemployed?What

is

Unemployment?Unemploymentrate#

unemployed=

#

in

labor

forcxe33100Three

Types

ofUnemployment343

Types

of

Unemployment#1.

Frictional

Unemployment•“Temporarily

unemployed”

or

being

betweejobs.•Individuals

are

qualified

workers

withtransferable

skills

but

they

aren’t

workinExamples:Highschool

or

college

graduates

looking

fo

jobs.•Individuals

that

were

fired

and

are

lookingfor

a

better

job.You’reFired!35Seasonal

Unemployment•This

is

a

specific

type

of

frictionalunemployment

which

is

due

to

time

of

yearandthe

nature

of

the

job.•These

jobs

will

come

backExamples:•Professional

Santa

Clause

Impersonators•Construction

workers

in

Michigan3

Types

of

Unemployment363

Types

of

Unemployment#2.

Structural

UnemploymentChanges

in

the

structure

of

the

labor

forcemake

someskills

obsolete.Workers

DO

NOT

have

transferable

skills

andthese

jobs

will

never

come

back.Workers

must

learn

new

skills

to

get

a

job.The

permanent

loss

of

these

jobs

is

called“creative

destruction.”

(Why?)Examples:VCR

repairmenCarriage

makers37Technological

Unemployment•Type

of

structural

unemployment

whereautomation

and

machinery

replaceworkers

causing

unemploymentExamples:•Auto

assemblers

fired

as

robots

take

overproduction

Producers

of

Capital

Goods

(tractors)fire

assemblers383

Types

of

Unemployment3

Types

of

Unemployment#3

Cyclical

UnemploymentUnemployment

that

results

from

economicdownturns

(recessions).As

demand

for

goods

and

services

falls,demand

for

labor

falls

and

workers

are

fireExamples:Steel

workers

laid

off

during

recessions.Restaurant

owners

fire

waiters

after

monthof

poor

sales

due

to

recession.Thissucks!3940Two

of

the

of

the

three

types

of

unemploymentare

unavoidable:•Frictional

unemployment•Structural

unemployment•Together

they

make

up

the

natural

rate

ofunemployment

(NRU).We

are

at

full

employment

if

we

have

onlythe

natural

rate

of

unemployment.•This

is

the

normal

amount

of

unemploymentthat

we

SHOULD

have.•The

number

of

jobs

seekers

equals

thenumber

of

jobs

vacancies.The

Natural

Rate

an

Full

Employment41In

other

words…Full

employment

means

NO

Cyclicalunemployment!Economists

generally

agree

that

anunemployment

rate

of

around

4

to

6percent

is

normal.4-6%

Unemployment

=

Full

EmploymentCurrently

the

U.S.

is

at

4%The

Natural

Rate

an

Full

EmploymentWhat

iswrong

with

the

unemployment

rate?It

can

misdiagnose

the

actual

unemployment

rabecause

of

the

following:Disgruntled

job

seekers-

Some

people

are

no

longer

looking

for

a

jobbecause

they

have

given

up.Part-Time

Workers-

Someone

who

wants

more

shifts

but

can’t

getthem

is

still

considered

employed.Race/Age

Inequalities-Hispanics

–

5.8%

for

JanuaryAfrican

American-

8.9%

for

JanuaryTeenagers-

15.3%

for

JanuaryIllegal

Labor-Many

people

work

under

the

table.Criticisms

of

the

Unemployment

Rate42Goal

#3LIMIT

INFLATIONCountryand

Time-Zimbabwe,

2008Annual

Inflation

Rate-79,600,000,000%Time

for

Prices

to

Double-24.7

hours43What

is

Inflation?Inflation

is

rising

general

levelof

pricesInflation

reduces

the“purchasing

power”

ofmoneyExamples:It

takes

$2

to

buy

what

$1bought

in

1982It

takes

$6

to

buy

what

$1bought

in

1961•When

inflation

occurs,

eachdollar

of

income

will

buyfewer

goods

than

before.44How

is

Inflation

measured?The

government

tracks

the

prices

of

the

same

goods

andservices

each

year.

This

“market

basket”

is

made

up

of

about

300commonly

purchased

goodsThe

Inflation

Rate-%

change

in

prices

in

1

year

They

also

compare

changes

in

prices

to

a

given

baseyear

(usually

1982)

Prices

of

subsequent

years

are

then

expressed

as

apercentage

of

the

base

yearExamples:2005inflation

ratewas

3.4%U.S.

prices

have

increase

98.3%

since1982

(base

year).The

inflation

rate

in

Bolivia

in

1985

was50,000%This

is

called

HyperinflationA

$25

meal

today

would

cost

$12,525

a

year

later45World

Inflation

Rates464748Is

Inflation

Good

or

Bad?49Identify

which

people

are

helped

andwhich

are

hurt

by

unanticipatedinflation?

A

man

who

lent

out

$500

to

his

friend

in

1960

andis

still

waiting

to

be

paid

back.A

tenant

who

is

charged

$850

rent

each

year.

An

elderly

couple

living

off

fixed

retirementpayments

of

$2000

a

monthA

man

that

borrowed

$1,000

in

1995

and

paid

itback

in

2006

A

women

who

saved

a

paycheck

from

1950

byputting

it

underher

mattressMake

a

T-Chart

Debtors-People

whoborrowmoneyA

business

where

theprice

of

the

productincreases

fasterthanthe

price

ofresourcesHurt

by

Inflation

Lenders-People

wholend

money

(at

fixedinterest

rates)People

with

fixedincomesSaversHelped

by

InflatioCost-of-Living-Adjustment

(COLA)Some

works

have

salaries

that

mirror

inflation.They

negotiated

wages

that

rise

with

inflation5051Measuring

InflationConsumer

Price

Index

(CPI)CPI

=Price

of

market

basketPrice

of

marketbasket

in

base

yearx

100Consumer

Price

Index

(CPI)The

most

commonly

used

measurement

inflation

forconsumers

is

the

Consumer

Price

IndexHereis

how

it

works:The

base

year

is

given

an

index

of

100To

compare,

each

year

is

given

an

index

#

as

well1997

Market

Basket:

Movie

is

$6

&

Pizza

is

$14Total

=

$20

(Index

of

Base

Year

=

100)2009

Market

Basket:

Movie

is

$8

&

Pizza

is

$17Total

=

$25

(Index

of

125

)•This

means

inflation

increased

25%

b/w’97

&

‘09•Items

that

cost

$100

in

’97

cost

$125

in

‘0952=Real

GDPx

100GDPDeflatorNominal

GDPCPI

vs.

GDP

DeflatorThe

GDP

deflator

measures

the

prices

of

all

goodsproduced,

whereas

the

CPI

measures

prices

of

onlythe

goods

and

services

bought

by

consumers.An

increase

in

the

price

of

goods

bought

by

firms

or

thegovernment

will

show

up

in

the

GDP

deflator

but

not

in

theCPI.The

GDP

deflator

includes

only

those

goods

and

services

proddomestically.

Imported

goods

are

not

a

part

of

GDP

andtherefore

don’t

show

up

in

the

GDP

deflator.If

the

nominal

GDP

in

’09

was

25

and

the

real

GDP(compared

to

a

base

year)

was

20

how

much

is

theGDP

Deflator?5354Problems

with

the

CPI

Substitution

Bias-

As

prices

increase

for

the

fixemarket

basket,

consumers

buy

less

of

these

productand

more

substitutes

that

may

not

be

part

of

themarket

basket.

(Result:

CPI

may

be

higher

than

what

consumers

are

really

paying)New

Products-

The

CPI

market

basket

may

notinclude

the

newest

consumer

products.

(Result:

CPImeasures

prices

but

not

the

increase

in

choices)3.

Product

Quality-

The

CPI

ignores

bothimprovementsand

decline

in

product

quality.(Result:

CPI

may

suggest

that

prices

stay

the

samethough

the

economic

well

being

has

improvedsignificantly)55Calculating

Nominal

GDP,Real

GDP,

and

InflationCalculating

CPI110$

42105315642085254Units

ofOutputYearNominal,GDPReal,GDPPrice

of

the

same

marketbasket

in

base

yearx

100CPI

=Make

year

one

the

base

yearPrice

of

market

basket

inthe

particular

yearPricePer

UnitCPI/

GDPDeflator(Year

1

asBase

Year)InflationRate56$40PricePer

UnitUnits

ofOutputYear1

10 $

4$40Nominal,GDPReal,GDP%

Changein

Prices=Year

2

-

Year

1Year

1X

100Inflation

RateInflationRateN/A572105504012525%3156906015020%42081608020033.33%5

25

4

100100100-50%CPI

or

GDPDeflator(Year

1

asBase

Year)100Calculating

CPICalculating

GDP

DeflatorNominal=100GDPDeflator

(Real

GDP)=Real

GDP58x

100GDPDeflatorNominal

GDPCalculations

In

an

economy,

Real

GDP

(base

year

=

1996)

is

$100billion

and

the

NominalGDP

is

$150

billion.Calculate

the

GDP

deflator.

In

an

economy,

Real

GDP

(base

year

=

1996)

is

$125billion

and

the

NominalGDP

is

$150

billion.Calculate

the

GDP

deflator.

In

an

economy,

Real

GDP

for

year

2002

(base

year

=1996)

is

$200

billion

and

the

GDP

deflator

2002(base

year

=

1996)

is

120.

Calculate

the

NominalGDP

for

2002.

Inan

economy,

Nominal

GDP

for

year

2005

(baseyear

=

1996)

is

$60

billion

and

the

GDP

deflator

200(base

year

=

1996)

is

120.

Calculate

the

Real

GDPfor

2005.59ReviewIdentify

the

3

goals

of

all

economiesDefine

Natural

Rate

of

UnemploymentDefine

inflation

rateWhat

is

a

market

basket?

Explain

the

difference

between

nominaand

real

interest

ratesHow

do

you

calculate

CPI?What

does

a

CPI

of

130

mean?Who

is

helped

and

hurt

by

inflation?

Why

did

Bolivia

experiencehyperinflation?10.List

10

old-