1. How Do Economists Measure the Size of an Economy?
1.1. gross domestic product- is the market value of all final goods and services produced within a country during a given period of time
1.2. net exports—the value of all exports minus all imports
1.2.1. By using the information for the GDP we can find out how well the economy is doing.
1.2.2. The GDP per capita tells us how much the average person makes which is a good indicator on how well the economy is doing.
1.2.2.1. Economist assign "market value" to all items to help determine the size of the economy.
2. What Does the Inflation Rate Reveal About an Economy’s Health?
2.1. consumer price index-is a price index for a “market basket” of consumer goods and services.
2.2. real cost of living-is the nominal cost of basic goods and services, adjusted for inflation.
2.2.1. You can track inflation over the years by tracking the cost of living over the last few years.
2.2.2. Not all inflation is bad some inflation can come from natural causes for example seasonal unemployment.
2.2.2.1. Inflation tends to influence future interest rates and raise them up.
3. How Do Economists Measure the Size of an Economy?
3.1. unemployment rate—the percentage of the labor force that is seeking work
3.2. Seasonal unemployment-occurs when businesses shut down or slow down for part of the year, often because of weather
3.2.1. The unemployment rate serves as a good indicator for the job market in an area.
3.2.1.1. People who make up the unemployment rate are people who are actively seeking a job not college student or people who are retired.
3.2.1.2. Regardless how good the economy is doing the the unemployment rate can never be at 0
4. How Does the Business Cycle Relate to Economic Health?
4.1. business cycle: a recurring pattern of growth and decline in economic activity over time
4.2. point at which an expansion ends marks the peak of the business cycle
4.2.1. Business cycles are irregular in both length and severity
4.2.2. The business cycle consists of four phases. These phases include a period of growth and a period of decline.