Chp. 23

In chapter 23 it discusses how to measure a nations economic growth which can be measured using the GDP: total income of everyone in the economy (measures society's economic well-being. Factors that all play a part in macroeconomics(the study of economy wide phenomena including inflation unemployment, and economic growth.GDP measures total income of everyone and the total expenditure on the economy's out of goods and services)are: inflation(rate at which prices are rising), unemployment(percentage of labor force that is out of work), retail sales(total spending at stores), trade deficit(imbalance of trade between the US and the rest of the world). In a whole economy income must equal expenditure. Circular flow diagram assumes that all goods and services are bought by households and households spend all of their income.GDP can be calculated by adding total expenditure by households or by adding up the total income. All transactions have a buyer and a seller no matter what. Gross domestic product: market value of all final goods and service produced within a country in a given period of time. Combo of many different products and all products (exceptions: drugs, veggies grown at home, mowing a lawn if you're married)it only includes the value of final goods (no intermediate goods).