Ch. 13 Measuring The Economy
by Kailey Trimmer
1. Key Point 1: Economists use the Consumer Price Index (CPI) to determine changes in the price level from one period to another.
2. 13.2 How do Economists Measure the Size of an Economy
2.1. Key Point 1: They can study the economic decision making of individuals, households and firms. Also known as microeconomics.
2.2. Key Point 2: Or they can study the economy as a whole. They can ask how big the economy is.
2.3. Key Point 3: he main measure of the size of a nation’s economy is its gross domestic product.
2.4. Terms Used: Gross Domestic Product and Microeconomics.
2.5. Link: http://economics.about.com/od/economicindicatorintro/a/measure_economy.htm This is a good article because it expands how and why the we measure the size of the economy and why. It also has explanations on the results of our economy.
3. 13.3 What does the Unemployment Rate tell us about an Economy's health
3.1. Key Point 1: The BLS is a government agency that collects and analyzes economic data. This agency determines the Unemployment rate.
3.2. Key Point 2: Like the GDP, the unemployment rate is a useful indicator of the health of an economy
3.3. Key Point 3: They measure the unemployed, and the employed. This helps them figure out a rate.
3.4. Key Terms Used: BLS, GDP, unemployment, unemployed, and employed.
4. 13.4 What does the inflation rate tell us about the economy's health
4.1. Key Point 2: A strong economy is likely to have a low level of inflation.
4.2. Key Point 3: A high inflation rate indicates an unhealthy economy, or deflation.
4.3. Key Terms Used: CPI, inflation, deflation.
5. 13.5 How does the business cycle relate to economic health
5.1. Key Point 1: The business cycle consists of four phases: expansion, peak, contraction (or recession), and trough.
5.2. Key Point 2: As measured by real GDP, the economy grows during an expansion and shrinks during a contraction.
5.3. Key Point 3: The peak marks the end of an expansion and the start of a contraction. The trough marks the end of a contraction and the start of a new expansion.
5.4. Key Terms Used: GDP, recession.
