Unit 3 - PRINCIPLES OF ECONOMICS

3.4 Macro-Economics

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 MICRO ECONOMICS - DEFINITION
It is the field of economics that studies the behavior of the
aggregate economy. Macroeconomics examines
economy-wide phenomena such as changes in
unemployment, national income, rate of growth, gross
domestic product, inflation and price levels.

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 ECONOMIC GROWTH/ RATE
Economic growth is an increase in the capacity of
an economy to produce goods and services, compared from
one period of time to another. It can be measured in nominal or
real terms, the latter of which is adjusted for inflation.

An economic growth rate is the percentage change in the

value of all of the goods and services produced in a nation
during a specific period of time, as compared to an earlier
period.

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 GROSS DOMESTIC PRODUCT (GDP)
GDP represents the monetary value of all goods and services
produced within a nation's geographic borders over a specified
period of time.

GROSS NATIONL PRODUCT (GNP)

GNP is the market value of goods and services produced by all
citizens of a country—both domestically and abroad.

GDP + Net factor income from abroad

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 UNEMPLOYMENT
A situation where someone of working age is not able to get a job but
would like to be in full-time employment.

INFLATION
A sustained increase in the general price level in an economy. It is is a
quantitative measure of the rate at which the average price level of a
basket of selected goods and services in an economy increases over
some period of time.
PRICE LEVEL
It is the average price of all the goods and services in a country or
area over a particular period of time
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