Economy for managers Macro
... A) consumption spending-personal consumer-durable, non-durable, services-biggest portion of GDP B) Gross Private Domestic Investment-Machinary+Equipment, all construction, increase in inventory c) Government spending d)Foreign spending-Xn=X-M GDP=C+I+G+Xn 2) Income on allocations (Earnings) a) wages, rents, interests, profits b) Indirect Bus tax c) CCA (capital consumption allowance) DI=C+S Okun’s law When unemployment rate went up 1%, that causes GDP to fall by around 3% Phillips Curve Shows relationship btw unemployment and inflation- graph Price Index To look for real productivity of GDP Fixed market basket-CPI(consumer price index), PPI(Producer price index) Moving market basket-Add up what actually being produced Classical Econ vs Keynesian Econ CLASSIC 4 things 1)Macro econ self adjusting/ 2) Zero Unemployment 3) Econ is made up of small, competing units, No monopoly force 4) Economically rational people 1.