Macro-economical indicators (Monetary Policy: (This can be measured with:,…
Broad increase in prices of goods and services
CPI is the most commonly used measures of inflation
GDP deflator converts nominal GDP to real GDP
Types of inflation
Too much money chasing too few goods.
Rising prices in goods or services with no suitable alternatives
measures a country’s gross domestic product using current prices, without adjusting for inflation.
also call current-dollar statistics
three measurement methods
Current Account Balance or Balance of Payments
A system that record the transactions of goods and products of the countries between themselves.
An exchange rate is the price of a nation’s currency in terms of another currency.
Has a two components
Formula to measure it
1.12 - 1.0950 = 0.025/1.0950 = 0.023. Multiply by 100 to get the percentage markup: 0.023 x 100 = 2.23%.
Monetary policy consists of the actions of a centralbank,other regulatory committee.
determines the size and rate of growth of the money supply, which in turn affects interest rates
This can be measured with:
Open market operations
Condition in which everyone gets the same in equal proportions.
Financial statement that present the government´s revenues and expenditures of the ensuing financial year.
Role of generating accountability for the actions of government at various levels.
Current and capital
Cash and unified
Fiscal policy refers to the use of government spending and tax policies to influence macroeconomic conditions.
Measure Fiscal policy
Fiscal measures are frequently used in tandem with monetary policy to achieve certain goals.
Civilian workers looking for a job and not receiving wages
Represent wasted potential production
Significant concern within macroeconomics
Workers are not qualified for the jobs that are available
Imperfect information and difficulties matching qualified workers with jobs
During recessions, there is an inadequate demand for labor and wages are slow to fall to a point where the demand and supply of labor are back in balance.
Real gross domestic product is a measurement of economic output that accounts for the effects of inflation or deflation.
nominal GDP divided by the deflator:
more realistic assessment of growth than nominal GDP.
measures the final output of all goods and services
Used to Calculate Growth
the percentage change in real GDP is the GDP growth rate.