Chapter 1 MEASURING A NATION'S INCOME

LEARNING OBJECTIVES 学习目标:

Understand how GDP is defined and calculated 

Examine the breakdown of GDP into its four major components

Distinguish between real GDP and nominal GDP

Demonstrate an ability to obtain and process the data of GDP

LECTURE VIDEO 学习视频1:

LEARNING OUTLINE 学习大纲:

1. Review of the Definitions of Microeconomics and Macroeconomics

a) Definition of microeconomics: the study of how households and firms make decisions and how they interact in markets.

b) Definition of macroeconomics: the study of economy-wide phenomena including inflation, unemployment, and economic growth.

2. The Economy's Income and Expenditure

a. To judge whether or not an economy is doing well, it is useful to look at Gross Domestic Product (GDP).

b. For an economy as a whole, total income must equal total expenditure. 

c. GDP measures total income of everyone in the economy and meanwhile total expenditure on the economy’s output of goods and services.