IN CONCLUSION: WEEK OF SEPTEMBER 30th

Recap

Upon the heels of your first exam , we jumped right into our discussion of macroeconomic issues. You learned that the three major topics of the macroeconomy are economic growth as measured by gross domestic product, unemployment and inflation.

You were introduced to nominal and real GDP, as well as how to compute both of these metrics using the expenditure approach where GDP = C + I + G + NX.

Make sure that you are able to distinguish between nominal and real values. Recall that the difference is inflation, which inflates or distorts the values of goods and services. In economics and in business, we always make adjustments for inflation by holding prices constant to a particular year, which we call a base year or index.

Looking Ahead

In the coming week, you will be introduced to unemployment. Here, we will cover the composition and calculation of the labor force, as well as the official unemployment rate. In addition, you will learn the different types of unemployment and how to distinguish among them.