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Macroeconomics by Mind Map: Macroeconomics

1. Chapter 1 : Introduction to Macroeconomics

1.1. Topic studied in Macroeconomics

1.1.1. Gross domestic product

1.1.2. Uemployment rate

1.1.3. Inflation rate

1.1.4. Aggregate behavior of households and industries

1.2. Inflation

1.2.1. Increase in the overall price level

1.2.2. Gain from Inflaction : Manufacturers, service providers and individuals who hold investments

1.2.3. Lose from Inflaction : Savers, Investors in long-term bonds, consumers and first-time homebuyer

1.3. Deflection

1.3.1. Average price level declines

1.4. Hyperinflation

1.4.1. Very rapid increse in the overall price level

1.5. Business cycle

1.5.1. Short-term ups and downs in the level of economics activity

1.5.2. Wave-like

1.5.3. Consists of growth, peak, recession and trough

1.6. Expansion

1.6.1. A period during which aggregate output rises

1.6.2. Associated with rising price levels

1.7. Bust

1.7.1. Between a trough and a peak

1.8. Recession

1.8.1. Associated with a negatif rate of growth of the economy

2. Chapter 2 : Measuring National Output and Income

2.1. Gross domestic product

2.1.1. Total market value of all final goods and services produced within a given period by factors of production located within a country

2.1.2. Measures the total spending of everyone in the economy

2.1.3. Measures the value of all output in the country

2.1.4. Measures the total income of everyone in the country

2.1.5. A good or service counted in GDP A new tire you buy for your personal car

2.1.6. If GDP deflator next year is less than the GDP this year, the price level has fallen

2.1.7. GDP measured in base year prices is real GDP

2.1.8. Real GDP increases during a year, output have increased

2.1.9. Illegal or underground economy not reflected in GDP

2.2. Example of final goods and services

2.2.1. A computer purchased by Federal Express to track shipments

2.3. An example of an intermediate good

2.3.1. The pizza sauce you purchase to make pizzas to sell for a fund-raiser for an organization you belong to

2.4. Double counting

2.4.1. Can be avoided by not counting the value of intermediate good in GDP

2.4.2. Can be avoided by using value-added approach

2.5. Gross national product

2.5.1. The total market value of all final goods and services produced by resources owned by a country, regardless of where prouduction takes place

2.5.2. GNP will exceed GDP if no foreign companies produces in a country, but many if the country's companies produced abroad

2.6. Current prices

2.6.1. Used to measure goods and services in calculating GDP

2.7. Equation for GDP

2.7.1. GDP=C+I+G+(X-M)

2.7.2. C=Consumption Durable goods Services Nondurable goods

2.7.3. I=Investment Nonresidential investment Residential investment Charge in business inventories

2.7.4. G=Goverment Spending Federal purchases of goods State and local purchases of goods

2.7.5. (X-M)= Export - Import

2.8. Depreciation

2.8.1. The amount of used up machinery in a year

2.9. Total income of households

2.9.1. Personal income

2.10. Component of investment

2.10.1. Change in business inventories

2.11. If disposable income spend, pensonal saving equal zero

3. Chapter 3 : Inflation and Unemployment

3.1. Unemployed

3.1.1. Temporarily laid off

3.1.2. Unemployed rate increases Lost job and start finding another job

3.1.3. Unemployed rate = (labor farce - employed) / labor force x 100

3.1.4. Unemployed = labor force - number of people employed

3.1.5. Structural unemployment Family obligations Job skills have become obsolete

3.2. Considered out of labor force

3.2.1. Full-time students

3.2.2. Full-time retiree

3.2.3. Full-time volunteer

3.3. In labor force

3.3.1. Now without work, job will start next month

3.3.2. Size of labor force decreses an individual quit job and decides to stay at home for a while 100 people who were looking for jobs stop looking for jobs

3.4. Employed

3.4.1. Retired from police force, started working an hour or two a day paid job

3.5. Recession

3.5.1. Inflation rate fall, unemployment rate rise

3.6. Sustained inflation

3.6.1. Increase in the overall price level continues over a significant period of time

3.7. Differences between intrest rate on loan and inflaction rate is real intrest rate

3.8. GDP deflator

3.8.1. Broadest-based price index available

3.9. Output of economy increased

3.9.1. adding more workers

3.10. Human Capital

3.10.1. The mental or physical skills people have

3.11. Employment rate = employed/labor force x 100

3.12. Formula

3.12.1. Labor force = employed + unemployed

3.12.2. Unemployment rate = unemployed/labor force x 100

3.12.3. Labor force participation rate = labor force/population x 100