Lecture Business economics - Lecture 13: Measuring a Nation’s Income - I. After completing this chapter, students will be able to: Consider why an economy’s total income equals its total expenditure, learn how gross domestic product (GDP) is defined and calculated. | Review of the previous lecture Oligopolists maximize their total profits by forming a cartel and acting like a monopolist. If oligopolists make decisions about production levels individually, the result is a greater quantity and a lower price than under the monopoly outcome. The prisoners’ dilemma shows that self-interest can prevent people from maintaining cooperation, even when cooperation is in their mutual self-interest. The logic of the prisoners’ dilemma applies in many situations, including oligopolies. Policymakers use the antitrust laws to prevent oligopolies from engaging in behavior that reduces competition. Lecture 13 Measuring a Nation’s Income - I Instructor: Abbas Course code: ECO 400 Lecture Outline The Economy’s Income And Expenditure The Measurement Of Gross Domestic Product The Components Of GDP Real Versus Nominal GDP GDP AND ECONOMIC WELL-BEING Measuring a Nation’s Income Microeconomics Microeconomics is the study of how individual households and . | Review of the previous lecture Oligopolists maximize their total profits by forming a cartel and acting like a monopolist. If oligopolists make decisions about production levels individually, the result is a greater quantity and a lower price than under the monopoly outcome. The prisoners’ dilemma shows that self-interest can prevent people from maintaining cooperation, even when cooperation is in their mutual self-interest. The logic of the prisoners’ dilemma applies in many situations, including oligopolies. Policymakers use the antitrust laws to prevent oligopolies from engaging in behavior that reduces competition. Lecture 13 Measuring a Nation’s Income - I Instructor: Abbas Course code: ECO 400 Lecture Outline The Economy’s Income And Expenditure The Measurement Of Gross Domestic Product The Components Of GDP Real Versus Nominal GDP GDP AND ECONOMIC WELL-BEING Measuring a Nation’s Income Microeconomics Microeconomics is the study of how individual households and firms make decisions and how they interact with one another in markets. Macroeconomics Macroeconomics is the study of the economy as a whole. Its goal is to explain the economic changes that affect many households, firms, and markets at once. Macroeconomics answers questions like the following: Why is average income high in some countries and low in others? Why do prices rise rapidly in some time periods while they are more stable in others? Why do production and employment expand in some years and contract in others? The Economy’s Income And Expenditure When judging whether the economy is doing well or poorly, it is natural to look at the total income that everyone in the economy is earning. For an economy as a whole, income must equal expenditure because: Every transaction has a buyer and a seller. Every dollar of spending by some buyer is a dollar of income for some seller. The Measurement Of Gross Domestic Product Gross domestic product (GDP) is a measure of the income and .
