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Transcript 
CPI Weighing
CPI Calculator
Price Level (PL)
CPI
CPI Weighing
CPI Calculator
Price Level (PL)
CPI
CPI Weighing
CPI Calculator
Price Level (PL)
CPI
In 1917, the price of
a first-class stamp
was $.03.
CPI Weighing
CPI Calculator
Price Level (PL)
CPI
In 1981, the price of
a first-class stamp
was $.20.
CPI Weighing
CPI Calculator
Price Level (PL)
CPI
In 1972, the price of
a movie ticket was
$1.77.
Producer Price Index
Price Level (PL)
PPI
Implicit Price Deflator
Price Level (PL)
Real GDP
Deflator
Price Level (PL)
Q = Real GDP=Y
Gross Domestic Product is the total market value
of all final goods and services produced inside a
country in a year.
Of course there is!! After all, this is an economics class.
onsumption
nvestment
overnment Spending
Net Exports
GDP Overview: 1992 Dollars DP: Overview ($Bil. 1992, SAAR)
2006 Q4
Gross Domestic Product
2006 Q1
99Q2
% of Real GDP
13,246.6 11,281 8,425.5
Personal Consumption Expenditures9,268.9 8,032
5,605.7
70.57% 67%
70%
Gross Private Domestic Investment 2,212.5 2,013.4 1,806.3
17% 17.69% 21%
Net Exports of Goods and Services -762.5 -678.2 -341.1
-6% -5.95% -4%
GDP
99Q1
98Q4
98Q3
98Q2
8,341.5
8,191.6
8,004.3
7,837.6
5,525.2
5,411.6
5,325.4
5,243.6
1,751.4
1,671.5
1,596.9
1,516.1
-289.9
-230.5
-242.2
-240.8
1,354.8
1,339.0
1,324.1
1,318.6
Government Consumption Expenditures
and Gross Investments
2,527.7 2,013.2
19% 17.68%
1,354.6
16%
CURRENT
REAL GDP:
$14,218,000,000,000
As
PL
Classical
Range
http://logic.csc.cuhk.edu.hk/~b024765/ricardo.jpg
http://logic.csc.cuhk.edu.hk/~b024765/smith.jpg
.
http://logic.csc.cuhk.edu.hk/~b024765/say.jpg
COVER BY JOHN HELD JR
http://www.sntc.org.sz/sdphotos/1880s.html
http://www.nytimes.com/learning/general/onthisday/bday/0605.html
http://logic.csc.cuhk.edu.hk/~b024765/keynes.jpg
Intermediate Range
Keynesian Range
Full
Employment
Q = Real GDP = Y
As
PL
Structural
Frictional
Cyclical
Unemployment
Classical
Range
Intermediate Range
Keynesian Range
Full
Employment
Q = Real GDP = Y
As
PL
History of Economics
from computer
Classical
Range
History of Economics
from Internet
Intermediate Range
Keynesian Range
Full
Employment
Q = Real GDP = Y
As
PL
Classical
Range
Intermediate Range
Keynesian Range
Full
Employment
Q = Real GDP = Y
As
PL
CPI
PPI
GDP
Classical Range
DEFLATOR
Intermediate Range
Keynesian Range
Ad
Yf
Q =Real GDP=Y
Aggregate Demand is downward sloping from
left to right. The reason: At higher price levels
the QUANTITY that is demanded is less
than when price levels are lower.
PL
Ad
Q =Real GDP =Y
Aggregate Demand can either increase or decrease depending
on which variables shift the aggregate demand curve.
An increase in aggregate demand is always a shift to the right
A decrease in aggregate demand is always a shift to the left.
PL
Ad
Ad1
Ad1
A category.
Components of-
Consumption
Investment (Gross Private Domestic Business
Investment)
Government Spending
(X - M) Net Exports
Savings
Taxes
MS Money Supply/Money Stock
Velocity
Something that varies or that
is prone to variation.
Variables that influence the components-
C onsumption Relative prices of products/services
People’s preferences/tastes
Expectations of the future
* Change in interest rates
Change in income
Variables that influence the components-
I nvestment Number of consumers
People’s preferences/tastes
* Expectations of the future profit
* Change in Inventories
* Change in Interest rates
Change in income
Gross Private Domestic Business Investment
Variables that influence the components-
Government Spending
Dumb Politicians
Variables that influence the components-
(X - M) Relative quality of foreign goods/services
Exports Imports
Relative price of foreign goods/services
International value of the dollar
Interest rates
Variables that influence the components-
S avings
Relative prices of products/services
People’s preferences/tastes
Expectations of the future
Change in Interest rates
Change in income
Variables that influence the components-
T axes
Stupit Politicians
Stupid
Variables that influence the components-
MS Money Supply/Money Stock
Banks
influenced by the
Federal Reserve
Variables that influence the components-
Velocity
As
PL
Classical Range
Intermediate Range
Keynesian Range
Ad1
28%
Ad
Yf
Y = Real GDP =Q
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