PART FIVE Macroeconomic Measurement, Models, and Fiscal Policy. Chapter 12: Introduction to GDP, Growth, and Instability. Gross Domestic Product.
Gross domestic product (GDP) is the total market value of all final goods and services produced annually within the U.S., whether by U.S. or foreign-supplied resources.
Adding It Up: GDP = C + Ig + G + NX
An expansion of real GDP (or real GDP per capita) over time is economic growth.
The unemployment rate is the percentage of the labor force unemployed.
Unemployment rate = x 100
GDP gap = actual GDP – potential GDP
The main measure of inflation in the U.S. is the Consumer Price Index, or CPI.
price of the most recent market basket in the particular year
price of the same market basket in 1982-1984
Real income =
Price index (in hundredths)