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BUSINESS CYCLE MEASUREMENT: Three of the most noted and often used measures of business cycle activity are real gross domestic product (especially the growth rate), unemployment rate, and inflation rate. Another group of measures fall under the broad heading of economic indicators and include leading economic indicators, coincident economic indicators, and lagging economic indicators. Real sophisticated economic types also follow measures such as changes in business inventories, Producer Price Index, M2 money supply, durable goods order, and others.
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Lesson 10: Gross Domestic Product | Unit 2: Looking Behind GDP
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Page: 6 of 25
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Measuring GDP in the U.S. economy uses data involving $8 trillion of production, 270 million consumers, hundreds of thousands of businesses, and a huge number of market transactions.- The circle on the left represents all current economic production in the economy. This is what GDP seeks to measure.
- But GDP can not measure this directly. Information for measuring GDP comes from market transactions.
- The circle on the right represents all market transactions.
- Much of the economic production circle overlaps the market transaction circle. But each circle has a slice not contained in the other.
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LEAKAGES LINE A graphical representation of the relation between the level of aggregate production and one or more leakages. The three leakages (non-consumption uses of the income generated from aggregate production) are saving, taxes, and imports. The leakages line sequentially adds, or layers, each of these three uses of income depending on the number of sectors used in the analysis (two, three, or four). The slope of the leakages line depends on which if any of the uses of income are induced by aggregate production. The leakages line is combined with the injections line (containing investment expenditures, government purchases, and exports) in the Keynesian injections-leakages model.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a coffee cup commemorating the first day of spring or a printer that works with your stockpile of ink cartridges. Be on the lookout for slow moving vehicles with darkened windows.
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This isn't me! What am I?
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"Lord, where we are wrong, make us willing to change; where we are right, make us easy to live with. " -- Peter Marshall, US Senate chaplain
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UTP
Unfair Trade Practice
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