Economics- the production distribution and consumption of goods and services
Macroeconomics- operation and health of the entire economy
1. What are the main goals of macroeconomics?
Technically, a recession is a decline in the GDP for two or more quarters.A depression is a prolonged recession, where you have mass unemployment, a level of national income well below the potential level, and great excess capacity
Gross Domestic Product (GDP)- the total $ value of all goods and services produced in a given year.
1. What is the difference between real and nominal GDP? Why is this important?
Nominal GDP is the total dollar value of all final goods and services produce in a year, in the current year’s dollars.
Real GDP is adjusted for changes in prices, measuring GDP in the prices of a base year.
The difference is important because we need Real GDP in order to compare how much was produced from one year to another, without the distortion of inflation.
1. What are two main problems with the measurement of the GDP?
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