罗莫高级宏观经济学第5版英文资源
罗莫高级宏观经济学第5版英文资源
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Fusce vulputate metus sed finibus interdum. Quisque tempus justo vel mi consequat, in ornare felis gravida. Suspendisse vel sapien et metus condimentum dignissim ut vel quam. Donec semper mi vitae orci ultrices, nec lacinia dolor placerat. Sed id condimentum elit. Aliquam id arcu eleifend, sollicitudin lectus eu, volutpat nulla.
1. Introduction
The fifth edition of Romer's Advanced Macroeconomics provides comprehensive resources for students studying macroeconomics at an advanced level. This article aims to summarize the English resources available in this edition.
2. Textbook
The textbook serves as the foundation for understanding macroeconomics concepts. Romer's Advanced Macroeconomics provides clear explanations and in-depth analysis of various macroeconomic theories and models. It covers topics such as economic growth, business cycles, inflation, and monetary policy. The book includes numerous examples, charts, and graphs to enhance understanding.
3. Lecture Slides
To complement the textbook, Romer's Advanced Macroeconomics offers lecture slides that can be used by instructors during classroom or online sessions. These slides highlight key points from each chapter and provide
visual aids to support student learning. The slides can be downloaded and customized to suit the instructor's teaching style.
4. Practice Questions
To reinforce learning, the fifth edition includes a collection of practice questions. These questions cover a wide range of topics and difficulty levels, allowing students to test their understanding of macroeconomic concepts. Solutions to the practice questions are provided at the end of the book, enabling self-assessment and further learning.
5. Case Studies
The case studies in the textbook provide real-world applications of macroeconomic theories. These studies analyze economic events and policies, offering students a chance to apply their knowledge to practical situations. The case studies encourage critical thinking and help students develop a deeper understanding of macroeconomics.
6. Online Resources
In addition to the textbook, Romer's Advanced Macroeconomics offers online resources. The official website provides supplementary materials, including data sets, additional readings, and interactive quizzes. Students can access these resources to further enhance their learning experience and deepen their understanding of macroeconomics.
7. Instructor's Manual
For instructors, the fifth edition includes an instructor's manual. This manual provides guidance on teaching the course and offers suggestions for
classroom activities and assessments. It also contains additional resources, such as sample syllabi and lecture notes, to assist instructors in delivering the course effectively.
8. Conclusion
Overall, Romer's Advanced Macroeconomics, 5th edition, offers comprehensive English resources for students and instructors studying macroeconomics. The textbook, lecture slides, practice questions, case studies, online resources, and instructor's manual combine to create a rich learning experience. Whether used in a classroom or for self-study, these resources contribute to a thorough understanding of macroeconomic principles and their applications.
Please note that the above content reflects a fictional article and does not provide actual resources for Romer's Advanced Macroeconomics, 5th edition.。
宏观经济学原理 第五版 英文原版课件macro-ch12-presentation
productivity, the average quantity of g&s produced per unit of labor input.
▪ Y = real GDP = quantity of output produced
L = quantity of labor so productivity = Y/L (output per worker)
7
Incomes and Growth Around the World
Questions:
▪ Why are some countries richer than others? ▪ Why do some countries grow quickly while others
seem stuck in a poverty trap?
A typical family with all their possessions in Mexico, a middle income country
GDP per capita: Life expectancy: Adult literacy:
$11,410 76 years 92%
A typical family with all their possessions in Mali, a poor country
14,421
1.0%
14,729
0.8%
1,333 1,836
0.3% –1.2% 6
Incomes and Growth Around the World
Since growth rates vary, the country rankings can change over time:
宏观经济学原理 第五版 英文原版课件macro-ch08-presentation
QE
Q
6
The Effects of a Tax
With the tax, CS = A PS = F Tax revenue =B+D Total surplus =A+B +D+F The tax reduces total surplus by C+E
APPLICATION: THE COSTS OF TAXATION
These effects are the same whether the tax is
imposed on buyers or sellers, so we do not make this distinction in this chapter.
APPLICATION: THE COSTS OF TAXATION
P
S
Size of tax
D
Q
15
APPLICATION: THE COSTS OF TAXATION
DWL and the Elasticity of Demand
P S
When demand is inelastic,
Size of tax
it’s harder for consumers to leave the market when the tax raises PB.
Would the DWL of a tax be larger if the tax were on:
A. Breakfast cereal or sunscreen? B. Hotel rooms in the short run or
hotel rooms in the long run?
C. Groceries or meals at fancy restaurants?
高级宏观经济学题解指南第五版
高级宏观经济学题解指南第五版1. 概述高级宏观经济学作为经济学领域的重要分支，在当今全球化、多样化的经济环境中扮演着至关重要的角色。
它涉及到国家整体经济发展、宏观经济政策、国际经济关系等诸多方面，对于经济学专业学生来说，学习高级宏观经济学知识是非常必要且重要的。
为了帮助学生更好地理解和掌握高级宏观经济学领域的知识，我们特此编写了本《高级宏观经济学题解指南第五版》。
2. 本书特点本书是在前四版的基础上进行了全面修订和更新，内容更加丰富、系统，涵盖了高级宏观经济学领域的核心理论、模型和实践应用。
与此本书还添加了大量的案例分析和实证研究，以帮助读者更好地理解理论知识，并将知识应用到实际问题中。
3. 本书构成本书共分为十章，分别是经济增长、产出与物价、货币与银行、国际贸易、国际货币体系、国际财政政策、经济周期、货币政策、财政政策以及宏观经济政策的协调。
每一章都涵盖了该领域的重要理论和案例，以及专门的习题训练部分。
4. 本书意义本书旨在帮助读者更好地理解高级宏观经济学的重要理论，掌握分析宏观经济问题的方法，同时也能够应用相关知识解决实际经济问题。
通过学习本书，读者将能够更好地理解和把握当前国际经济形势，更好地为国家和社会的经济发展做出贡献。
5. 结语《高级宏观经济学题解指南第五版》作为一部权威的高级宏观经济学教材，将对读者的学习和研究提供重要的帮助。
我们相信，通过认真学习和研究本书，读者一定能够更好地理解和应用高级宏观经济学的理论知识，为国家和社会的经济发展做出积极的贡献。
祝愿读者学习愉快、收获满满！扩写新内容第一部分的内容：6. 续写第一部分的内容：本书旨在帮助读者更好地了解高级宏观经济学的重要理论，并掌握分析宏观经济问题的方法。
宏观经济学作为经济学的重要分支，是研究整体经济运行规律以及经济政策对整体经济的影响的学科，而高级宏观经济学则更着重于深入探讨宏观经济学的核心问题，如经济增长、货币政策、财政政策等。
宏观经济学原理 第五版 英文原版课件macro-ch13-presentation
ACTIVE LEARNING 1
A. Calculations
▪ Suppose GDP equals $10 trillion,
consumption equals $6.5 trillion, the government spends $2 trillion and has a budget deficit of $300 billion.
and investment?
▪ How do govt policies affect saving, investment, and
the interest rate? 1
Financial Institutions
▪ The financial system: the group of institutions
= the portion of national income that is not used for consumption or government purchases
5
Saving and Investment
Recall the national income accounting identity: Y = C + I + G + NX
▪ Find public saving, taxes, private saving,
national saving, and investment.
8
ACTIVE LEARNING 1
Answers, part A
Given: Y = 10.0, C = 6.5, G = 2.0, G – T = 0.3
1. If consumers save the full $200 billion, national saving is unchanged, so investment is unchanged.
罗默《高级宏观经济学》课件
罗默的《高级宏观经济学》课件一、引言罗默的《高级宏观经济学》是一本在学术界广受推崇的经济学教材，深入浅出地介绍了宏观经济学的基本理论和分析方法。
本书共分为两个部分，第一部分主要讨论宏观经济学的微观基础，包括消费者行为、生产者行为、市场均衡和一般均衡等；第二部分则重点介绍宏观经济学的核心议题，如经济增长、失业、通货膨胀、经济周期等。
本课件旨在帮助读者更好地理解和掌握罗默的《高级宏观经济学》的内容，为宏观经济学的学习和研究提供有益的参考。
二、微观基础1.消费者行为罗默认为，消费者行为是宏观经济学微观基础的重要组成部分。
消费者的目标是实现效用最大化，即在预算约束下，选择一组商品和服务，使得总效用达到最大。
为此，罗默介绍了无差异曲线、预算线等概念，以及如何通过求解拉格朗日函数来找到消费者最优消费组合的方法。
2.生产者行为生产者行为是宏观经济学微观基础的另一个重要组成部分。
罗默认为，生产者的目标是实现利润最大化，即在生产技术、要素价格和市场价格的约束下，选择一组生产要素和产量，使得总利润达到最大。
罗默详细介绍了生产函数、成本函数、利润函数等概念，以及如何通过求解拉格朗日函数来找到生产者最优生产组合的方法。
3.市场均衡和一般均衡罗默认为，市场均衡是宏观经济学的核心概念之一。
市场均衡指的是在某一市场价格下，市场需求等于市场供给。
罗默介绍了如何通过供求曲线来分析市场均衡，以及市场均衡的稳定性条件。
罗默还介绍了一般均衡理论，即在一个包含多个市场和多种商品的体系中，各个市场之间相互影响，形成一个稳定的均衡状态。
三、核心议题1.经济增长罗默认为，经济增长是宏观经济学研究的核心议题之一。
经济增长指的是一个国家或地区在一定时期内，实际产出水平持续提高的过程。
罗默详细介绍了经济增长的源泉，包括技术进步、资本积累、劳动力增长等，并分析了不同增长模型的特点和适用条件。
2.失业罗默认为，失业是宏观经济学的另一个核心议题。
失业指的是劳动力市场上，愿意工作但未能找到工作的人口。
曼昆《宏观经济学》(第五版)课堂讲义PPT(英文)Ch04
Let’s now express the quantity of money in terms of the quantity of goods and services it can buy. This amount, M/P is called real money balances. Real money balances measure the purchasing power of the stock of money. A money demand function is an equation that shows what determines the quantity of real money balances people wish to hold. Here is a simple money demand function:
This shows the link between the demand for money and the velocity of money. When people hold a lot of money for each dollar of income (k is large), money changes hands infrequently (V is small). Conversely, when people want to hold only a little money (k is small), money changes hands frequently (V is large). In other words, the money demand parameter k and the velocity of money V are opposite sides of the same coin.
罗默高级宏观经济学讲义PPT学习教案
开放政策
分析开放政策对经济增长的 影响机制和效应，包括贸易 自由化、投资自由化和金融 自由化等方面。
03
技术进步、创新与 产业升级
技术进步对经济增长贡献
提高劳动生产率
技术进步通过改进生产工艺、提高设备效率等 方式，直接提高劳动生产率，促进经济增长。
优化产业结构
技术进步推动传统产业向高技术、高附加值方 向转型升级，促进产业结构优化升级。
详细解析货币政策如何通过影 响利率、汇率、资产价格等变 量，进而影响总需求和经济活
动的传导过程。
财政政策效应评估及优化建议
财政政策目标 介绍财政政策的主要目标，如促进经济 增长、实现社会公平、维持经济稳定等。
财政政策效应评估 探讨如何评估财政政策的效应，包括 经济增长效应、收入分配效应、社会
稳定效应等。
07
总结回顾与拓展延 伸
关键知识点总结回顾
索洛模型
外生技术进步与资本深化
内生增长模型
知识、创新与人力资本
关键知识点总结回顾
劳动力市场与真实经济周 期
技术冲击与经济增长波动
真实经济周期理论
01
03 02
关键知识点总结回顾
新凯恩斯主义经济学 价格粘性与总需求管理 劳动力市场不完全性与工资粘性
前沿问题探讨和展望
社会创新氛围营造
政府和社会各界共同努力，营造 鼓励创新、宽容失败的社会氛围， 激发全社会创新活力。
产业升级路径选择与政策支持
产业升级路径选择
根据资源禀赋、产业基础和发展阶段等因素，选择适合的产业升级 路径，如发展高新技术产业、促进传统产业转型升级等。
政策支持体系构建
政府通过制定产业政策、提供财政金融支持、加强人才培养等方式， 构建完善的政策支持体系，推动产业升级。
曼昆经济学原理第五版宏观全ppt课件
Q 1000 1100 1200
增加：
= $6,000 = $8,250 = $10,800
37.5% 30.9%
26
例：
皮萨
年份
P
Q
2005
$10
400
2006
$11
500
2007
$12
600
计算每年的真实GDP, 以2005 年作为基年:
2005: $10 x 400 + $2 x 1000
2006: $10 x 500 + $2 x 1100
年是2000年)
$4,000 $2,000
名义GDP
$0 1965 1970 1975 1980 1985 1990 1995 2000 2005
30
GDP平减指数
• GDP平减指数是对总体价格水平的衡量 • 定义:
GDP平减指数= 100 x
名义 GDP 真实 GDP
▪ 衡量经济通货膨胀率的一种方法是计算从一年到
100.0
2006: 100 x (8250/7200) =
114.6
2007: 100 x (10,800/8400) =
128.6
32
主动学习 2
GDP的计算
物品 A 物品 B
2007 (基年)
2008
P
Q
P
Q
$30 900 $31 1,000
$100 192 $102 200
2009
P
Q
$36 1050
39
预期寿命 (年)
12个国家的GDP和预期寿命
印度尼西亚 中国 墨西哥
巴西 巴基斯坦
俄罗斯 印度 孟加拉国
曼昆宏观经济学原理第五版英文讲义Chapter25
Chapter Production and Growth25Economic Growth Around the World •Real GDP per person–Living standard–Vary widely from country to country •Growth rate–How rapidly real GDP per person grew in thetypical year•Because of differences in growth rates–Ranking of countries by income changessubstantially over time2TableThe variety of growth experiences1Country Period Real GDP per personat beginning of period Real GDP per personat end of periodGrowth rate(per year)Japan Brazil China Mexico Germany 1890–20061900–20061900–20061900–20061870–2006$1,4087296701,0852,045$33,1508,8807,74011,41031,8302.76%2.392.342.242.043yCanada Argentina United States IndiaUnited Kingdom Indonesia Bangladesh Pakistan 1870–20061900–20061870–20061900–20061870–20061900–20061900–20061900–20062,2242,1473,7526324,50283458369034,61015,39044,2603,80035,5803,9502,3402,5002.041.881.831.711.531.481.321.22Productivity: its Role and Determinants•Productivity–Quantity of goods and services–Produced from each unit of labor input •Why productivity is so important–Key determinant of living standards–An economy’s income is the economy’soutput4Productivity: its Role and Determinants•How productivity is determined–Physical capital•Stock of equipment and structures•Used to produce goods and services–Human capitalH it l•Knowledge and skills that workers acquirethrough education, training, and experience5Productivity: its Role and Determinants •How productivity is determined–Natural resources•Inputs into the production of goods and services•Provided by nature, such as land, rivers, andmineraldeposits–Technological knowledge•Society’s understanding of the best ways toproduce goods and services6•Population growth & Standard of living growth –is it sustainable?•Argument–Natural resources ‐will eventually limit how much world’s economies Are natural resources a limit togrowth?the world s can grow–Technological progress ‐often yields ways to avoid these limits–Improved use of natural resources–Recycling7•Are these efforts enough to permit continued economic growth?•Prices of natural resources–Scarcity ‐reflected in market pricesN t l iAre natural resources a limit togrowth?–Natural resource prices •Substantial short ‐run fluctuations•Stable or falling ‐over long spans of time–Our ability to conserve these resources•Growing more rapidly than their supplies are dwindling •Market prices ‐no reason to believe that natural resources are a limit to economic growth 8Economic Growth and Public Policy •Saving and investment•Raise future productivity–Invest more current resources in the production of capital–Trade ‐off•Devote fewer resources to produce goods and services for current consumption9Economic Growth and Public Policy •Diminishing returns and the catch ‐up effect •Higher savings rate–Fewer resources –used to make consumption goods–More resources ‐to make capital goods –Capital stock increases–Rising productivity–More rapid growth in GDP10Economic Growth and Public Policy •Diminishing returns and the catch ‐up effect •Diminishing returns–Benefit from an extra unit of an input –Declines as the quantity of the input increases•In the long run; higher savings rate –Higher level of productivity–Higher level of income–Not higher growth in productivity or income11Figure Outputper WorkerIllustrating the production function11 2. When the economy has ahigh level of capital, anextra unit of capital leads toa small increase in output.12Output per WorkerThis figure shows how the amount of capital per worker influences the amount of output per worker. Other determinants of output, including human capital, natural resources, and technology, are held constant. The curve becomes flatter as the amount of capital increases because of diminishing returns to capital 11. When the economy has a low level of capital, anextra unit of capital leads to a large increase in output.Economic Growth and Public Policy•Diminishing returns and the catch‐up effect •Catch‐up effect–Countries that start off poor–Tend to grow more rapidly than countries that start off rich•Poor countries–Low productivity–Even small amounts of capital investment •Increase workers’ productivity substantially13Economic Growth and Public Policy•Diminishing returns and the catch‐up effect •Rich countries–High productivity–Additional capital investment•Small effect on productivity•Poor countries–Tend to grow faster than rich countries14Economic Growth and Public Policy•Investment from abroad–Another way for a country to invest in newcapital–Foreign direct investment•Capital investment that is owned and operated byC it l i t t th t i d d t d ba foreign entity–Foreign portfolio investment•Investment financed with foreign money butoperated by domestic residents15Economic Growth and Public Policy•Education–Investment in human capital–Gap between wages of educated anduneducated workers–Opportunity cost: wages forgonei f–Conveys positive externality•Problem for poor countries–Brain drain16Economic Growth and Public Policy •Health and nutrition–Healthier workers –more productive–The right investments in the health of thepopulation•One way for a nation to increase productivity andO f ti t i d ti it draise living standards–Historical trends: long‐run economic growth •Improved health ‐from better nutrition•Taller workers –higher wages –betterproductivity17Economic Growth and Public Policy •Health and nutrition–Vicious circle in poor countries•Are poor–Because populations are not healthy•Populations are nothealthy–Because they are poor»Cannot afford better healthcare and nutrition18Economic Growth and Public Policy•Property rights and political stability •Foster economic growth–Protect property rights•Ability of people to exercise authority over theresources they ownth•Courts –enforce property rights–Promote political stability19Economic Growth and Public Policy •Free trade•Poorest countries–Inward‐oriented policies•Avoid interaction with the rest of the world •Outward‐oriented policies–Integrate into the world economy •International trade in goods and services –Can improve economic well‐being20Economic Growth and Public Policy •Research and development•Knowledge –public good–Farming methods–Aerospace research•Air Force; NASA–Research grants•National Science Foundation•National Institutes of Health–Tax breaks–Patent system21Economic Growth and Public Policy•Population growth•Large population–Large labor force–More consumers•Stretching natural resources?•Diluting the capital stock–High population growth•Reduces GDP per worker–Promoting technological progress22。
英文版宏观经济学复习提纲 Chapter 5 Chapter 5 GDP Measuring total production and income
5GDP: Measuring Total Production and Income Chapter SummaryMacroeconomics is the study of the economy as a whole, including such topics as growth, business cycles, inflation, employment, unemployment, and trade with other nations. In order to talk about these topics, it is necessary to be able to measure how the economy is performing and to be able to make comparisons between time periods and countries.To measure the performance of the economy, economists use a measure of economic activity called gross domestic product (GDP). In this chapter you will learn about GDP: how it is constructed, what its components are, and its strengths and weaknesses as a measure of production. Also covered in the chapter is the concept of real and nominal variables and a price index referred to as the GDP deflator.Learning ObjectivesWhen you finish this chapter you should be able to:1.Explain how total production in an economy is measured. Total production is measured bygross domestic product (GDP), which is the value of all final goods and services produced in aneconomy during a period of time. When we measure the value of total production in the economyby calculating GDP, we are simultaneously measuring the value of total income. GDP is dividedinto four major categories of expenditures: consumption, investment, government purchases, andnet exports. We can also calculate GDP by adding up the value added of every firm involved inproducing final goods and services.2.Discuss whether GDP is a good measure of economic well-being. GDP does not includehousehold production, which refers to goods and services people produce for themselves, orproduction in the underground economy, which consists of concealed buying and selling. Theunderground economy in some poorer countries may be more than half of measured GDP. GDP isa flawed measure of well-being because it does not include the value of leisure, it is not adjustedfor pollution or other negative effects of production, and it is not adjusted for changes in crime andother social problems.3.Discuss the difference between real variables and nominal variables.Nominal GDP is thevalue of goods and services evaluated at current year prices. Real GDP is the value of goods andservices evaluated at base year prices. By keeping prices constant, we know that changes in realGDP represent changes in the quantity of goods and services produced in the economy. Real GDPis greater than nominal GDP in years before the base year and less than nominal GDP for yearsafter the base year. The GDP Deflator is a measure of the price index and is calculated as (NominalGDP/Real GDP) x 100.4.Understand how the economic growth rate is measured. Economic growth is the percentagechange in real GDP from one period to the next, and is calculated as: [GDP t – GDP t-1]/GDP t x 100.66 Chapter 5Chapter ReviewChapter Opener: Australia’s economic performanceAustralia has enjoyed extremely strong economic growth since the early 1990s, outperforming other industrialised countries such as the US and Britain. This performance has been underpinned by structural reforms within the economy that has improved productivity. At the same time that real GDP has been increasing strongly, inflation has remained within our central bank’s target range, while unemployment has been steadily falling.Gross Domestic Product Measures Total ProductionAn economy that produces a large quantity of goods and services creates an interesting measurement problem. How do we add together the production of different goods and services to arrive at an aggregate measure of total production?Economists have developed a method of aggregating the wide variety of production by calculating a measure called gross domestic product or GDP. GDP is defined as the market value of all final goods and services produced in a country during a period of time. We aggregate goods by adding their value, and we determine their value by their price. We count only newly-produced goods and services, not all transactions, and we count only transactions that have a market price. Thus GDP is the sum of price multiplied by quantity for all final goods and services produced.Helpful Study HintLook at Solved Problem 5.1 in the text (page 132) and in the study guide for practice calculating GDP. Understanding these calculations and how GDP is measure is important in mastering macroeconomics.When we calculate GDP as the value of production in a country, we are also measuring the value of income in that country. This is because $100 spent on a good will ultimately result in $100 worth of income for the various factors of production that produced that good. The measurement of GDP is often referred to as national income accounting. GDP measures both production and income.We can also look at GDP from the point of view of expenditures. From the expenditure point of view we divide GDP into four components: (1) Consumption expenditures are expenditures made by households (excluding the purchase of new houses, which we count in investment expenditures). (2) Investment expenditures are final goods and services purchased by business firms (both equipment for production and new buildings), changes in inventories (which is the difference between production and sales), and residential construction purchased by households. (Look at the Don’t Let This Happen to You! in this chapter in the textbook, page 137, for more discussion of the definition of investment.) (3) Government purchases are spending by the federal, state, and local governments. (4) Net Exports are exports minus imports.GDP: Measuring Total Production and Income 67Helpful Study HintImportant. Remember that investment is the purchase of final goods by business firms. This includes equipment used in production and buildings used for production, such as factories and office buildings. Investment in the sense we are using it this chapter does not include buying stocks, bonds, and other types of financial assets.The components of GDP can be expressed in an equation as:Y = C + I + G + NXThe equation tells us that GDP (Y) equals consumption (C) plus investment (I) plus government purchases (G) plus net exports (NX).The Australian Bureau of Statistics (ABS) also calculates several other measures of production and income in addition to GDP. These are Gross National Product (GNP), National Income, Personal Income, and Disposable Personal Income.Helpful Study HintAsk yourself how the purchase by an Australian consumer of a shirt made in Australia will influence GDP. How will your answer be different if the shirt is made in China?The value added method is an alternative way of calculating GDP that also avoids the problem of double counting intermediate goods. Value added refers to the additional market value a firm gives to a product and is equal to the difference between the price the firm sells a good for and the price it paid other firms for intermediate goods.Methods of Measuring Gross Domestic Product?The ABS produces three alternative (but theoretically equivalent) methods of calculating GDP: the production method (based on the value added by each firm in the production process), the expenditure method (the sum of the total final expenditure by households, investors, governments and net exports), and the income method (the sum of all the income generated from the production of all final goods and services). The reason these are all equivalent is due to the circular flow model of an economy, whereby the income generated from the factors of production (labour, capital, natural resources and entrepreneurship) must be equal to the expenditure by the recipients of these payments. See page 135 for a visual description of this circular flow model.Does GDP Measure What We Want It to Measure?GDP measures total production. GDP does not include household production. GDP does not count transactions68 Chapter 5in the underground economy. For Australia, these omissions do not cause a serious distortion in the measurement of total production because the underground economy is relatively small and does not change in size very much from year to year. Unless leisure results in a market transaction it does not influence GDP. GDP does not subtract the costs of negative non-market effects of production (such as pollution).Real GDP versus Nominal GDPGDP is calculated using the quantities of final goods and services produced and current market prices. GDP can change because either production changes or because the prices of goods and services change. If the price of a product increases from one year to the next and we produce the same quantity of the product in both years, GDP will be higher in the year with the higher price even though production has not increased.To fix this problem, economists have developed an alternative measure called real GDP. Real GDP is calculated by designating a particular year as the base year. The prices of goods and services in the base year are used to calculate the value of goods and services in all other years.GDP is often referred to as either nominal GDP or current dollar GDP, and real GDP is often called constant dollar GDP.Helpful Study HintAn increase in nominal GDP does not always mean that output is increasing. See the Study Guide Solved Problem 5-3 below.In an economy with rising prices, nominal GDP will be smaller than real GDP in years before the base year, and nominal GDP will be larger than real GDP in years after the base year. In the base year, nominal GDP and real GDP will have the same value.The GDP DeflatorWe can use the values of Nominal and Real GDP to calculate a measure of prices in the economy. The GDP Deflator is a measure of average prices of goods and services compared to the base year. The GDP deflator is calculated as:nominal GDPGDP deflator = x 100real GDPHelpful Study HintA value of the GDP deflator of 108 would imply that the average price of good and services is 8% higher than prices in the base year. This is not the inflation rate. The inflation rate is the rate of change in prices from (usually) the previous year, not the base year. See the Study Guide Solved Problem 5.4 below.GDP: Measuring Total Production and Income 69Solved ProblemsChapter 5 in the textbook includes two Solved Problems to support learning objectives 1 (“Explain how total production is measured”) and 3 (“Discuss the difference between real variables and nominal variables”). The following Solved Problems support these learning objectives as well.Solved Problem 5.3 Supports Learning Objective 1: Explain how total production is measured.The Relationship Between Nominal and Real GDPTables 1 and 2 present two alternative scenarios for GDP for the years 2000 and 2005. Suppose that our economy produces two final products, pens and paper. The quantities of output of pens and paper and their prices for the years 2000 and 2005 are given in Tables 1 and 2. Calculate nominal and real GDP for all the years.Table 1Year Pens PaperQuantityQuantity PricePrice2000 $1.20 200 $2.00 5002005 $2.00 175 $3.00 455Table 2Year Pens PaperQuantityQuantity PricePrice2000 $1.20 200 $2.00 5002005 $2.00 225 $2.30 550Solving the ProblemStep 1: Review the chapter material. This problem is about calculating GDP, so you may want to review the section “Gross Domestic Product Measures Total Production,” which begins on page 131of the textbook.Step 2: Calculate nominal GDP for years 2000 and 2005 for the data in both Table 1 and Table 2 and the change in nominal GDP between these years in both tables. GDP is calculated as the sum of the market value of final goods and services produced during the year. For this economy the value of GDP is the sum of the value of pens and paper. The value of pens in a year is the price of a pen multiplied by the quantity of pens produced.The GDP calculations are:Year Calculation GDP2000 ($1.20 x 200) + ($2.00 x 500) $1,2402005 ($2.00 x 175) + ($3.00 x 455) $1,715Based upon these data, GDP increases by $1715 − $1240 = $475 from 2000 to 2005.Now suppose the price and quantity data are as shown in Table 2. The GDP calculations are:70 Chapter 5Year Calculation GDP2000 ($1.20 x 200) + ($2.00 x 500) $1,2402005 ($2.00 x 225) + ($2.30 x 550) $1,715As in Table 1, the GDP calculations show that the value of GDP increased by $475 from 2000 to 2005. Notice that the two economies described are very different. In Table 1, the quantities of paper and pens produced both declined from 2000 to 2005, while in Table 2, the quantity of pens and paper produced increased from 2000 to 2005. But in both options nominal GDP increased by the same dollar amount.Why does this happen? Because in Table 1, the increase in prices was large enough to offset the smaller level of production. Consequently the value of production increased without actual quantities of output produced increasing.We can isolate the increase in production by using real GDP. When calculating real GDP, we value output with the price of goods in a base year. Using 2000 as a base year, we would calculate real GDP using 2000 prices instead of using the current year prices.Step 3: Calculate real GDP. Use year 2000 as the base year.The real GDP calculations are:GDPRealYear Calculation2000 ($1.20 x 200) + ($2.00 x 500) $1,2402005 (Table 1) ($1.20 x 175) + ($2.00 x 455) $1,1202005 (Table 2) ($1.20 x 225) + ($2.00 x 550) $1,370So in Table 1, nominal GDP increased and real GDP decreased, but in Table 2 both nominal GDP and real GDP increased.Solved Problem 5.4 Supports Learning Objective 3: Discuss the difference between real and nominal variables. Calculating the GDP Deflator and the GDP Deflator Inflation RateThe table below gives nominal and real GDP in billions of dollars for the period 2000-2004. Calculate the GDP deflator and the GDP deflator inflation rate for those years.Real GDPYear NominalGDP2000 $9,817.0 $9,817.02001 10,128.0 9,890.72002 10,487.0 10,074.82003 11,004.0 10,381.32004 11,728.0 10,837.2GDP: Measuring Total Production and Income 71Solving the ProblemStep 1: Review the chapter material. This problem is about calculating real and nominal GDP, so you may want to review the section “Real GDP versus Nominal GDP,” which begins on page 141 of the textbook .Step 2: Calculate the GDP Deflator. The GDP deflator is defined as the ratio of nominal GDP to real GDP. The table below has values calculated using the formula: Nominal GDP GDP Deflator = ×100Real GDPYear Nominal GDP Real GDP GDP deflator 2000 $9,817.0$9,817.0 100.0 2001 10,128.09,890.7 102.4 2002 10,487.010,074.8 104.1 2003 11,004.010,381.3 106.0 2004 11,728.010,837.2 108.2Step 3: Calculate the GDP Deflator Inflation Rate. The GDP Deflator inflation rate is the rate of change in the GDP deflator. It is computed using the formula:t t-t t-1GDP Deflator - GDP Deflator GDP Deflator Inflation Rate = ×100GDP Deflator 1The calculated values are:Year Nominal GDP Real GDP GDP deflator Inflation Rate 2000 $9,817.0$9,817.0 100.0 - 2001 10,128.09,890.7 102.4 2.4% 2002 10,487.010,074.8 104.1 1.7% 2003 11,004.010,381.3 106.0 1.8% 2004 11,728.010,837.2 108.2 2.1%For 2004, the value of the price index implies that the average price of goods and services is 8.2% higher than the base year (2000). The inflation rate of 2.1% implies that in 2004 on average the prices of goods and services are 2.1% higher than in 2003.72 Chapter 5Self-Test(Answers are provided at the end of the Self-Test.)Multiple-Choice Questions1.The use of macroeconomic analysis to help the federal government design policies that help the economyrun more efficiently isa.an absolute necessity, according to economists.b. a practice suggested by politicians but not by economists.c. a controversial question among economists.d.ideal in theory but nonexistent in practice because our knowledge of the economy as a whole isin fact very limited.2.Which of the following terms is opposite of the term “final goods” in the definition of GDP?a.Intangible goodsb.Unfinished goodsc.Partial goodsd.Intermediate goods3.Which of the following is counted in this year’s GDP?a.Only this year’s production of goods and servicesb.Only goods that are both produced and sold within Australiac.New goods produced and sold this year plus the value of used goods resold this yeard.This year’s production of goods and services added to the value of GDP last year4.If we add up the value of every final good and service produced in the economy, we must get a total thatis exactly equal to the value ofa.investment. national product.c.disposable personal income.d.all of the income in the economy.5.In the circular flow diagram, who supplies factors of production in exchange for income?a.Householdsb.Firmsc.The governmentd.All of the above6.Fill in the blank. The flow of funds from ___________ into the financial system makes it possible forgovernment and firms to borrow.ernment and firmsb.householdsc.investment banksd.exportsGDP: Measuring Total Production and Income 73 7.Which of the following goods and services would be excluded from personal consumption expendituresin the Australian Bureau of Statistics (ABS) statistics?a.Medical carecationc. A haircutd. A new house8.Which of the following is included in the economist’s definition of investment?a.The purchase of a machine, factory, or houseb.The purchase of a share of stockc.The purchase of a rare coin or deposit in a savings accountd.All of the above9.When accounting for exports and imports in GDP, which of the following is correct?a.Exports are added to the other categories of expenditures.b.Imports are added to the other categories of expenditures.c.Both exports and imports are added to the other categories of expenditures.d.Both exports and imports are subtracted from the other categories of expenditures.10.Which of the following is true about the consumption component of Australian GDP in 2004?a.Consumer spending on durable and nondurable goods is greater than consumption on services.b.Consumer spending on durable goods is greater than the sum of spending on nondurable goodsand on services.c.Consumer spending on nondurable goods is greater than the sum of spending on nondurablegoods and on services.d.Consumer spending on services is greater than the sum of spending on durable and nondurablegoods.11.The difference between the price the firm sells a good for and the price it paid other firms for intermediategoods is calleda.producer surplus.b.fixed investment.c.value added.d.profit.12.According to most economists, is not counting household production or production in the undergroundeconomy a serious shortcoming of GDP?a.Most economists would answer “no” because these types of production do not affect the mostimportant use of the GDP measure, which is to see how the economy is performing over shortperiods of time.b.Most economists would answer “yes” because these types of production are likely to growsignificantly from one year to the next.c.Most economists would answer “no” because the purpose of measuring GDP is to see how theeconomy performs over fairly long periods of a decade or more.d.Most economists would answer “yes” because these types of production are likely to be a largecomponent of the economy (or large percentage of measured GDP), especially in countries likeAustralia.74 Chapter 513.If Australians still worked 60 hour weeks, as they did in 1890,a.both GDP and the well-being of the typical person would be much higher than they are.b.both GDP and the well-being of the typical person would be lower than they are.c.GDP would be much higher than it is, but the well-being of the typical person would notnecessarily be higher.d.GDP would be lower than it is, but the well-being of the typical person would be higher.14.Real GDP isa.the value of goods and services evaluated at current year prices.b.the value of goods and services evaluated at base year prices.c.equal to the value of nominal GDP in every year except for the base year.d. a measure of output that was replaced by nominal GDP some time ago.15.Suppose that the base year is 2000 and we want to calculate real GDP for 2005. Which procedure wouldyou use?a.Multiply the quantities in 2000 by the prices in 2005, and add up the results.b.Multiply the quantities in 2005 by the prices in 2005, and add up the results.c.Multiply the quantities in 2005 by the prices in 2000, and add up the results.d.Multiply the quantities in 2005 by the prices in 2005, and subtract them from nominal GDP in2000.ing the year 2000 as the base year, and assuming that prices during the 1990s were lower on averagethan prices in 2000, we can conclude thata.nominal GDP was lower than real GDP in the 1990s.b.nominal GDP was higher than real GDP in the 1990s.c.nominal GDP was equal to real GDP during all these years.d.neither nominal GDP nor real GDP were good measures of GDP.17.When a significant fraction of domestic production takes place in foreign-owned facilities, a country’sdifference between GDP and GNP is as follows:a.GNP will be a more accurate measure of the level of production within the country’s borders.b.GDP will be much larger than GNP.c.GNP will be almost identical to GDP.d.GNP will be closer to zero.18.In the National Income Accounts, sales taxes are referred to asa.subsidies.b.excise taxes.c.indirect business taxes.ernment revenue.19.To arrive at personal income from national income, the ABS musta.add corporate retained earnings.b.add profits.c.add government transfer payments.d.All of the above20.The best measure of the income households actually have available to spend isa.national income.b.disposable personal income. national product.d.Gross Domestic Product.Short Answer Questions1.GDP is a measurement of the market value of final goods and services produced in an economy in oneyear. What is the difference between a final good and an intermediate good? Why do we only count final goods in GDP and not intermediate goods?2.Suppose that an economy produces only cricket bats and footballs. The prices and quantities of thesegoods for years 2000 and 2005 are given below.Year Cricket Bats FootballsP Q P Q2000 $4.00 75 $6.00 452005 $5.00 100 $9.00 60 Calculate nominal GDP and real GDP assuming that the year 2000 is the base year. Explain why nominal GDP increased more than real GDP. Also calculate the GDP deflator.3.If prices are rising (as they have in the Australian economy throughout the second half of the 20thcentury), in years before the base year real GDP will be larger than nominal GDP. In years after the base year, nominal GDP will be larger than real GDP. Explain why this is true.4.You just bought a 100 year old house. How does that transaction influence GDP? What about the portionof the house price that goes to the real estate agent? You then hired a local contractor to re-do the wiring.You paid the contractor $10,000. The contractor had to buy new wire. How does the purchase of wire by the contractor influence GDP? What if you had done the wiring yourself? In this case, you bought $2,000 in wire to complete the task. How would this influence GDP? Why do the two methods of wiring the house have different implications for calculating GDP when the actual production (a house rewired) is the same?5.What is the difference between GDP and GNP? Is one always bigger than the other?True/False QuestionsT F 1. Macroeconomics is the study of the economy as a whole.T F 2. GDP is the value of all goods and services produced in a country during a time period.T F 3. GDP measures the value of goods and services and the value of the income earned in producing those goods and services.T F 4. Consumption spending is divided into two parts, durable goods and non-durable goods.T F 5. The purchase of 100 shares of Apple computer stock is an example of investment spending. T F 6. Net exports (NX) is defined as imports minus exports.T F 7. Value added is the price at which a firm sells its output minus the price it paid for its inputs.T F 8. The sum of all value added by all firms is the same as GDP.T F 9. In Australia, household production and the underground economy is about 50 percent of GDP.T F 10. The value of GDP is reduced to reflect the impact of pollution generated by production.T F 11. Real GDP is a better measure of output than nominal GDP.T F 12. For every year, nominal GDP is always greater than real GDP.T F 13. GNP is the value of final goods and services produced by labour and capital supplied by Australian residents, even if the production occurs outside Australia.T F 14. NNP is GNP plus the amount of depreciation in that time period.T F 15. Personal income is the best measure of the income households have available for spending.Answers to the Self-TestMultiple-Choice QuestionsQuestion Answer Comment1 c It remains a controversial question among economists as to whether such policies arereally needed or whether the economy might in fact work better without them.2 d A distinction is made between final good and services, which are purchased by finalusers and are not included in the production of any other goods or services, andintermediate goods and services, which are used as inputs into the production ofother goods and services.3 a GDP includes only production that takes place during the indicated time period.GDP does not include the value of used goods. If you buy a DVD and six monthslater you resell that DVD, the purchase is not included in GDP.4 d When we measure the value of total production in the economy by calculating GDP,we are simultaneously measuring the value of total income.5 a Firms use the factors of production to produce goods and services. Householdssupply the factors of production to firms in exchange for income.6 b The flow of funds from households into the financial system makes it possible forgovernment and firms to borrow.7 d Personal consumption expenditures are made by households and are divided intoexpenditures on services, such as medical care, education, and haircuts; expenditureson nondurable goods, such as food and clothing; and expenditures on durable goods,such as automobiles and furniture. The spending by households that is not includedin consumption is spending on new houses. Spending on new houses is included ininvestment expenditures.8 a Economists reserve the word investment for purchases of machinery, factories, andhouses. Why don’t economists include purchases of stock or rare coins or deposits insavings accounts in the definition of investment? The reason is that these otheractivities don’t result in the production of new goods.9 a Exports are goods and services produced in Australia, but purchased by foreignbusinesses, households, and governments. We need to add exports to our othercategories of expenditures because otherwise we would not be including all newgoods and services produced in Australia. Imports are goods and services producedin foreign countries, but purchased by Australian businesses, households, andgovernments. We need to subtract imports from total expenditures, becauseotherwise we would be including spending that does not result in production of newgoods and services in Australia.10 d Consumer spending on services is greater than the sum of spending on durable andnondurable goods. In Australia and other industrial countries there has been acontinuing trend away from the production of goods and towards the production ofservices.11 c Value added refers to the additional market value a firm gives to a product and isequal to the difference between the price the firm sells a good for and the price itpaid other firms for intermediate goods.12 a The most important use of GDP is to measure how the economy is performing overshort periods of time, such as from one year to the next. For this purpose, omittinghousehold production and production in the underground economy won’t have mucheffect, because these types of production are not likely to be significantly larger orsmaller fractions of total production from one year to the next.13 c GDP does not include the value of leisure, but we may value leisure as much as the。