Calendar4+-+National+Income+Accounting

Lecture Notes:
2.

**__Week 1__:** The circular flow model, business cycles, and GDP (Syllabus Section 2.1)

 * __Homework Due__: Read Mankiw Chapter 23 ( The Economy's Income and Expenditure, The Measurement of Gross Domestic Product, and The Components of GDP sections) and watch the following video.

media type="youtube" key="ZdGnhusKnRU" height="315" width="560" align="center"


 * __Khan Academy__
 * [|Circular flow]
 * [|GDP]
 * [|Investment and consumption]
 * [|Components of GDP (expenditures)]


 * __Assessments and A__ __ ctivities __ : Lecture on the circular flow model, business cycles, and GDP (PDF below)
 * [[file:1 - National Income Accounting and GDP.pdf]]

Approaches to m easuring GDP and GDP as a measure of well-being (Section 2.1)

 * __Homework Due__: Read Mankiw Chapter 23 (Is GDP a Good Measure of Economic Well-Being section) and watch the following videos.
 * media type="youtube" key="1s8f4qjnZdQ" height="315" width="560"
 * __Khan Academy__
 * [|The income and expenditure methods of calculating GDP]
 * [|Final and intermediate goods]
 * [|Components of GDP (expenditures)]
 * [|Calculating GDP examples]
 * [|Real GDP and Nominal GDP]
 * [|GDP deflator]
 * [|Calculating real GDP using the GDP deflator (example)]


 * __Assessments and Activities__: Free-response/problem and lecture


 * __//Free-response/problem//__: You will work cooperatively with your partner to construct a response to the following prompt.


 * __Explain each of the following in regards to GDP__:
 * Why an economy's income must equal its expenditure.
 * Why transfer payments are excluded.
 * Why including transactions of used goods make GDP a less informative measure of economic well-being.
 * Why it is desirable for a country to have a large GDP, giving an example of something that would raise GDP and yet be undesirable.


 * __//other Lecture notes//__: Measuring GDP and GDP as a Measure of Economic Well-being (PDF below)
 * [[file:Real and Nominal GDP and GDP as a Measure of Well-being.pdf]]


 * __Related Readings__
 * __[|National Income Accounts]__
 * __[|Economic Growth]__

**__week 2__:** Calculating the unemployment rate and evaluating its value as a measure of economic performance (Syllabus Section 2.1)

 * __Homework Due__: Problem set on calculating GDP. Watch the following video.
 * __ Khan Academy __
 * __[|The unemployment rate]__


 * __Assessments and Activities__: Free-response/problem and lecture


 * __//Free-response/problem//__: Use the information below to construct a response to the prompt that follows.
 * __ Milk __
 * __2008__: Price ($1); Quantity (100 quarts)
 * __2009__: Price ($1); Quantity (200 quarts)
 * __2010__: Price ($2); Quantity (200 quarts)
 * __Honey__
 * __2008__: Price ($2); Quantity (50 quarts)
 * __2009__: Price ($2); Quantity (100 quarts)
 * __2010__: Price ($4); Quantity (100 quarts
 * __Prompt__
 * 1) Compute nominal GDP, real GDP and the GDP deflator for each year, using 2008 as the base year.
 * 2) Compute the percentage change in in nominal GDP, real GDP and the GDP deflator in 2009 and 2010 fro the preceding year. For each year, identify the variable that does not change. Explain in words why your answer makes sense.
 * 3) Did economic well-being rise more in 2009 or 2010? Explain.


 * __//Lecture//__: Unemployment (PDF below)
 * [[file:Calculating Unemployment.pdf]]

**__week 3__:** Price indeces and calculating the inflation rate (Syllabus Section 2.1)

 * __Homework Due__: Read Mankiw (Chapter 24) and watch the following videos.
 * __ Khan Acadmy __
 * [|Introduction to inflation]
 * [|CPI and using a basket of goods to calculate inflation]
 * [|Inflation data]


 * __Assessments and Activities__: Free-response/problem and lecture


 * __//Free-response/problem//__: You will work cooperatively with your partner to construct a response to the following prompt.
 * __The Bureau of Labor Statistics announced that in February 2008, of all adult Americans, 145,993,000 were employed, 7,381,000 were unemployed, and 79,436, 000 were not in the labor force. Use this information to calculate the__:
 * 1) Adult population
 * 2) Labor force
 * 3) Labor-force participation rate
 * 4) Unemployment rate


 * __//Lecture//__: Price indeces and calculating the inflation rate (PDF below)
 * [[file:Price Indeces and Calculating the Inflation Rate.pdf]]


 * __Related Readings__
 * __[|Consumer Price Indexes]__

Inflation (Syllabus Section 2.1)

 * __Homework Due__: Problem set on calculating inflation and unemployment


 * __Assessments and Activities__: Free-response and test review


 * __//Free-response//__: You will work cooperatively with your partner to construct a response to the following prompt.


 * Suppose that the residents of Vegopia spend all of their income on cauliflower, broccoli and carrots. In 2008, they buy 100 heads of cauliflower for $200, 50 bunches of broccoli for $75, and 500 carrots for $100. In 2009, they buy 75 heads of cauliflower for $225, 80 bunches of broccoli for $120, and 500 carrots $100.
 * 1) Calculate the price of each vegetable in each year.
 * 2) Using 2008 as the base year, calculate the CPI for each year.
 * 3) What is the inflation rate in 2009?


 * //__Test Review__//