CHAPTER 13 MEASURING THE ECONOMY

1. 13.2 How Do Economists Measure the Size of an Economy?

1.1. the Department of Commerce's Bureau of Economic Analysis are the people who study the GPD

1.2. They measure it in 2 main ways! Micro and macroeconomics

1.2.1. Macroeconomics looks at the working economy as a whole

1.2.2. Microeconomics is studying the personal decision making of households, businesses and everyday people

1.3. a main way to look at a nations economy is to look at their GDP-

1.3.1. Gross domestic product

1.4. GDP is determined on each market price of every legal good/service sold in the country

2. 13.3--What Does the Unemployment Rate Tell Us About an Economy’s Health?

2.1. The lower the unemployment rate the better the economy- more people have jobs to support themselves and can contribute to local economies

2.1.1. unemployed people are ones without jobs but actively seeking employment

2.2. They measure the unemployment rates by the BLS who collect gov info and stats on communities!

2.2.1. BLS- Bureau of Labor Statistics.

2.3. there are four different types of unemployment and can be more specific to peoples circumstances

2.4. a healthy economy faces a small unemployment rate!

2.4.1. but this can discourage the small amount of unemployed if there are few openings pushing them further away from working:(

3. 13.4--What Does the Inflation Rate Reveal About an Economy’s Health?

3.1. inflation is the percentage increase in the average price level of goods and services from one month or year to the next

3.2. its tracked by the same government agency that tracks the unemployment rate

3.3. BLS people track changes in the cost of living using ---consumer price index

3.4. In the United States we have come to expect a certain amount of gradual inflation, or creeping inflation,

4. 13.5--How Does the Business Cycle Relate to Economic Health?