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The Level of overall economic activity

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5 Macroeconomic Goals
Steady economic growth, Low Employment, Low inflation, Faveral payment position, Equitable Distribution of Income
Savings, Imports, Taxes
Investments, Exports, Government Spending
Circular Flow of income
Housholds provide factors of production, Firms provide Goods and Services
GDP output measurement
Monetary value of all firms in a economy minus the cost of inputs
GDP income measurement
Monetary value of all the incomes earned
GDP expenditure measurement
Monetary value of all spending on goods and services
Gross Domestic Product
Measurement of total of all economic activity in a country
Gross National Income
GDP + Income earned from abroad
Net National Income
GNI - Depreciation
The capital that used up and should be replaced
Nominal/Real GDP
Real GDP = Nominal GDP adjusted for inflation
GDP per capita
The output per person
Limitations of National Income Statistics
Inaccuracies, Unrecorded economic activity, External costs, Quality of life concerns, composition of output
Green GDP
Measure of GDP that takes into account of enviromental costs from the production of the goods and services
Business cycle stages
Boom, Recession, Trough, Recovery
Reason for business cycle
Fear of inflationary pressure
Level 8