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Data of Macroeconomics

The document provides an overview of key macroeconomic concepts, including Gross Domestic Product (GDP), Real and Nominal GDP, Consumer Price Index (CPI), and unemployment metrics. It explains how GDP measures total income and expenditure, differentiates between nominal and real GDP, and discusses the CPI's role in measuring inflation. Additionally, it outlines the classification of the labor force and the calculation of unemployment rates.

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Fatma Ezzahra Lessoued
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10 views4 pages

Data of Macroeconomics

The document provides an overview of key macroeconomic concepts, including Gross Domestic Product (GDP), Real and Nominal GDP, Consumer Price Index (CPI), and unemployment metrics. It explains how GDP measures total income and expenditure, differentiates between nominal and real GDP, and discusses the CPI's role in measuring inflation. Additionally, it outlines the classification of the labor force and the calculation of unemployment rates.

Uploaded by

Fatma Ezzahra Lessoued
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Data Of Macroeconomics :

1. Gross domestic product (GDP) :


GDP measures:
- total income
- total output
- total expenditure
GDP can perform the trick of measuring both total income and total
expenditure because these two things are the same. For an economy as a whole,
income must equal expenditure.
- Gross Domestic Product (GDP) is the market value of all final
goods and services produced within an economy in a given period
of time.
- GDP counts the value of only final goods, not intermediate goods.

GDP = market value of final goods prod


= sum of value added at all stages of production.

= Y = C + I + G + NX

- C = Consumption: The value of all goods and services bought by


households including durable goods, nondurable goods and
services.
- I = investment: Spending on goods bought for future use, it is
divided into 3 subcategories; Business fixed investment,
Residential fixed investment, Inventory investment.
➡ Investment does not include purchases that merely reallocate existing assets
among different individuals.
- G = Government Spending: includes all government spending on
goods and services, It excludes transfer payments to individuals,
such as Social Security and welfare.
- NX = Net exports: The value of goods and services sold to other
countries (exports) minus the value of goods and services that other
countries sell to us (imports) = exports – imports
2. Real and Nominal GDP :
- Nominal GDP: the market value of all final goods and services
produced.
- Nominal GDP measures these values using current prices.
- also called GDP at current prices or GDP in value or GDP in
current dollar
- Real GDP: the value of goods and services measured using a
constant set of prices.
- Changes in real GDP can only be due to changes in quantities.
- also called GDP at constant prices or GDP in volume (quantity)
or GDP in constant dollar

𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝐺𝐷𝑃
GDP Deflator = 𝑅𝑒𝑎𝑙 𝐺𝐷𝑃
× 100

𝑉𝑎𝑙𝑢𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟 − 𝑉𝑎𝑙𝑢𝑒 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑦𝑒𝑎𝑟


Growth Rate = 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑦𝑒𝑎𝑟
× 100

GNP =𝐺𝐷𝑃 + 𝐹𝑎𝑐𝑡𝑜𝑟𝑠 𝑜𝑓 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠 𝑓𝑟𝑜𝑚 𝑎𝑏𝑟𝑜𝑎𝑑 − 𝐹𝑎𝑐𝑡𝑜𝑟𝑠 𝑜𝑓 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠 𝑡𝑜 𝑎𝑏𝑟𝑜𝑎𝑑

3. Consumer Price Index (CPI) :


is a measure of the overall cost of the goods and services bought by
a typical consumer
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑏𝑎𝑠𝑘𝑒𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
CPI = 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑏𝑎𝑠𝑘𝑒𝑡 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑏𝑎𝑠𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
× 100
𝐶𝑃𝐼 𝑓𝑜𝑟 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟 − 𝐶𝑃𝐼 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑦𝑒𝑎𝑟
Inflation Rate = 𝐶𝑃𝐼 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑦𝑒𝑎𝑟
× 100

Why the CPI may overstate inflation? :


- Substitution bias: The CPI uses fixed weights, so it cannot reflect
consumers’ ability to substitute toward goods whose relative prices have
fallen.
- Introduction of new goods: The introduction of new goods makes
consumers better off and, in effect, increases the real value of the dollar.
But it does not reduce the CPI, because the CPI uses fixed weights.
- Unmeasured changes in quality: Quality improvements increase the
value of the dollar, but are often not fully measured.
4. CPI Vs GDP deflator:

CPI GDP deflator


-Prices of non-consumer goods are -Prices of non-consumer goods are
excluded from the CPI included in the GDP deflator ( if
not domestically produced)
-Prices of imported consumer -Prices of imported consumer
goods are included in the CPI goods are excluded from the GDP
deflator
-The basket of goods is fixed -The basket of goods changes
every year

5. Unemployment:
The Bureau of Labor Statistics (BLS) classifies the population into
three categories through a survey:
1) Employed: This category includes those who at the time of the
survey worked as paid employees, worked in their own
business, or worked as unpaid workers in a family member’s
business.
It also includes those who were not working but who had jobs
from which they were temporarily absent
2) Unemployed (not employed, looking for work): This category
includes those who were not employed, were available for
work, and had tried to find employment during the previous
four weeks.
It also includes those waiting to be recalled to a job from
which they had been laid off.
3) Not in the labor force (not employed, not looking for work) :
This category includes those who fit neither of the first two
categories, such as a full-time student, homemaker, or retiree.

Labor Force = 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 + 𝑈𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
Unemployment Rate = 𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒
× 100
𝐿𝑎𝑏𝑜𝑟 𝐹𝑜𝑟𝑐𝑒
Labor Force Participation Rate = 𝐴𝑑𝑢𝑙𝑡 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
× 100

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