About This Chapter
Measuring the Economy
Economy is a term that typically describes the monetary flow and conditions of a particular country. There are many factors that are used to measure the economy. You've probably heard the term economy thrown around during news broadcasts. When doing stories on the real estate market, stock market, retail sales and other money-related topics, reporters often refer to the economy in general as a reference for the condition for each market segment. Many times the economy is to blame for problems with employment, too. To help you better understand what all the buzz is when it comes to the economy, our lessons will help you learn how an economy works and how it is determined whether an economy is in good or bad condition.
To understand how the economy is measured, you have to understand how it works. Lessons will cover the circular flow of activity that occurs in an economy. Learn how all the factors of an economy - goods, services, resources and production - are dependent upon each other for good economic conditions.
Discover the Expenditure Approach to measuring the economy. Study the concept of Gross Domestic Product (GPD) and how it is used in the Expenditure Approach. Find out the components of GPD. See how it contributes to growth in the economy. Also learn about the differences between an intermediate and final good.
Wrap up these lessons with a look at investments. Research the difference in investment and investments in economics. Thanks for watching!
1. Circular Flow of Economic Activity: The Flow of Goods, Services & Resources
Learn about the simple model used to describe where money goes and what it is exchanged for in a market economy. The circular flow model of economic activity shows you the basic relationships between households, firms and the government.
2. Gross Domestic Product: Using the Income and Expenditure Approaches
In this lesson, you will learn how economists measure gross domestic product using two different methods - the income approach and the expenditure approach.
3. Gross Domestic Product: Definition and Components
Learn how economists measure the total production of an economy using gross domestic product (GDP). This lesson also outlines the components that make up a GDP. How do we calculate the economic value of a nation?
4. Gross Domestic Product: Items Excluded from National Production
In this lesson, you'll gain a better understanding of what the gross domestic product is by exploring things that are excluded from it. Why do we count some items in the GDP but not others?
5. Investment vs. Investments in Economics
Discover the important difference between investment in economics and investments that individuals make by saving out of their income. This lesson defines and outlines the basic components of gross private domestic investment.
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Other chapters within the Economics 102: Macroeconomics course
- Scarcity, Choice, and The Production Possibilities Curve
- Comparative Advantage, Specialization and Exchange
- Demand, Supply and Market Equilibrium
- Inflation Measurement and Adjustment
- Understanding Unemployment
- Aggregate Demand and Supply
- Macroeconomic Equilibrium
- Inflation and Unemployment
- Economic Growth and Productivity
- Money, Banking and Financial Markets
- Central Bank and the Money Supply
- Fiscal and Monetary Policies
- Foreign Exchange and the Balance of Payments
- Inflows, Outflows, and Restrictions
- Studying for Economics 102