a Abel Bernanke Chapter. 2. The Measumment ard Stucture af the Mabnemeh —Geomeneg, (Wes ream Alc : famerierk woeel rn. recasting Cliente ecomemne _aced- Alimest- 200 de ve_seme form of ofpicial NT Aces The NT Alcs aw bacedt onc) iclea -lhat the amk Ccomemic act! that _aceuss. dusseg apd ef hme Cae be meaored in te 2— rs —d._the amt_e4 © papen diced caaclialing olp aaod up im —uinkeamediate ehages or pred” _C he PAsdack App), 2 the meernee fecetfed by the preclucere of olp (the ncome. Abb) 5 g = a the amt a pending by tne ilttimale p thaners of olp ( the exbd “app 7 O i ich A fined a ct & r 2. t Howeres, ae ines) Uredes lng NE ’ Fa that, ercepe for phobleme such Ao _InCom, r&bportect — deta, abl 3 Approaches gree tdlerbeal meaaurement® wf the — Bank ch pussent etonéme act”. an The Preduer Abbroach.'— menrourer econenrie act” by aelding the emet Value pf GAS proctuced excludling any gM of services vsed bp in 1otesmeciate ages off pao THis a.ppso.aeh makes noe of valiee collect coppsdach' "Fra Value avleled of ay __ producer isthe value of . kt _oukpok Commu! a value of Te anak & _puschaoes fre octies. producers ch er cht bey é Sere a Com ee eG a aeet 2 Tre Invome_A ppreach__meaaureds economic. act! ey edbing att | uncome Fecewed by paeducers ff col p,_tncluling mages_revetveel W by wostere 8 pot! recerved ennere of firms: aS Finalty, tre exp approach renaures act! by calling the ak Spent by all otlimate usere G—eukput Avg Three. Abbroaches Are Vuivalont 2 ag Paeduct,"Intome oxpod approaches Give thea, answer Ak no acecolent. Why ¢ d lot_obseave ut 3 1- Jurcelne¥.c Orange Gutcee hao a met Value of $4o,cop only buoz tak 16” Wlak PPL are w0i00i +0 sped 40 loud at. ‘ ep— Pes _TRere eee Ahly Two buoineaaes uv am coods Orange Toe 9 uicelne y a (daicelne produces owns -t oborales— we cellsremnge ute) (sae oe ie Arty — ————e sho Tirbaluc Bsome +o ey — Orowaelne Gawarc hens 1 Wi paid +o Ox \ne_Emblo f 1Sec0 a re Aap. ged 4s a good that is (eset) prooluced pbs ~ rater onl! matucal A ) 2 ut woe 4O — __psooluce phe. Latest gow, a arse, gece! Z mot eal up im ol fern pal that te ee ‘A. NE clectale jo tA, Fy Ge ad at pede ite ena me —Anotnes subtle dictinehon Fi tes ed gf oster un cd treatment 64 clin loves tt» TAventories ane obhens of unbdlal pee govole Gerda praveat_st coun cnalesuh etal by jf rea Ee = sere nmnaees be jour, Fy nl ys wit) 4 J000 Worth « A of flows _ _ on eee eee of! 1S. netic Jeo woth i ca) peers. Tre dofference lotw” he ov 4 |e0 worth o jt tens, eg ual the jaws: dutrg ayes a in eee reprecents — of Hors baa Wo, oy Aig ial eu—AS In the cece of Cap. a eunventory In vctt- IS treated — Ag | tt. fired aecd. M thu 4 _GDP_htoz, eel —tHawtaatories “om __hanol oly ety pots ._produchve G Ope ea. he pcre es a 2 eS Versus Goes 7 k SNE. St Gross Nabevad precducl jc the met value ef Final Ges mel, prodoeeal by olomesine factors” ~_pred™ ol cixcent Pd.) wi pp oe 5 slang glad within a hy: crea = Tre dit bbw a UEPP Lee wn ie ee Tene ote a Otike le lho (dle meatic choy. For €x!— Vi a U-S- Cont” aS ua Canoli Aredia mean urecl bey wi eee tho tne cornet? poi receives ae d Caudle Gove, ~_corusted in Us: BNP but ek in_US Gpp. fe eg ene Lb te iuaeal A | aun U8 Ane 0) Peden ves naaamens earned £ are ie none benz _d_pewd™ occurs widin the of Uc: Gnp C os are _Countecl tn the ome C ip INP ar ae ; Es pp oe the_ “value ~_ Cabs bot An Eel U6. ctaak dcttinuta bod 0 SS Jeep mt __ cou Tener bit mer us GNP: —_ LA Wry — We define. Cu FP) eee sl be .tmeceme _poust to _clomreahe _frcters Poel —__by ol gest of “the woorlo minus turcome fereial to. co)aug Fors ng domerne eco d+ —— +, GDP = GNP.—NEP- i in podf. US GDP. = fico bilbow 2 GNP fi ls328 ull For vs, a iyposeoee yf Less Han Dh dictinchon bey “@Np © GDP 1s) mere imps “en auch ao bgypt & Ths ke moors abrond. THe Tankey that ve nea sor) Ls ih ca Cannel by ‘workers abtenal - et oat ide _ GDP.= = I sme Co Abp } “ — as, pend’ os fe yes: meaousee 4D Q specipret pel of proach» wralin, a nebo dung time. 5 7 Bigosat Pode Cor on Y= GpPe Fhe tal Hey = dete oe \ - v ict es The oe called Income - Dae veletin boon ub “States. tncome egurd expe 1. Conapt = Conob® is art by lomissbre sean ge — incluoles @. Cprotmes cutables > - vag teenh of ges, 7 dee cars ty, furnrwe vappline Cot, mot eves eee eer Dudes ‘Invstad okt choster “dyneal stems, @ incase tee > food Hobag e fele 20 on, @ Soevired 7 edn”, health (an, + potent Paitin - 2. aoa othe e: peng lap ge La, ealleal » fried Itt an frm's. . daventory holdiy eattecl Wrtoy Iovate a Gharate: fixe howett . > spending i eres on Sars. factorres, warehowees § afin budoluge distort (madres, vehi Brepotent, rer of y x ‘Software.C ferdentad | Pe ae =z : Iste ae pe "4 on comot™ of new) < : i Powrsr a apaitme - buildings They ane, Yreaterk as Caps gdh boot they Provide a service (sheller) Over & tna ! eA of Press ss lke Conapt, Invatt ic Rerdter spa ow gota proclus cool gate nt Bem cantt sell whole, reaubting A 10 )ovebbrost. Ty a AES In invertorien ares In afd) Foren purchrea : ‘orjdold “a eed . Laos Me ee L degrng SPU epredscee| imueds bE brompp hte Ca dbieds ty A, QHonemers or Purcraced. a gem selon Doh aD: de 2 5. Cov Poirehuoet of G's O42 jpobulole ang oor "by ae, govt ger & se produces Geod or BERYL Epc MOET on domeshc: conf veil Peers for Servicers Tne Sr dveh Sassaasiiod areaot Charttebte -clonatows indunance | pay fs jk Peder Comered by tds..crtogory ff ae at & Impoode y_-. =. wT 4 A F S ~ 8B. Curent oy we Aplus >| geve enterprrceg 1 : ee ubhally Ihe Prog | buarmers eg Hod rane ee by dead adh, E water, elecdic ft Sewer Companies acai es -0._f MA tyra firms hewn ‘favvaal pafeies Eyes cdttem yy tage qd f ; Saale publit dnanshorkiny Ww 22 Given medawpoldtan atea tyPt ee a Zopeenty ompmbing Brose AYE § olewnted Intins. Tn aclditen lp s Combonente 2 I need 40 be a'ecounte 4 “for a , Bothec ems | '., Stabstce? Dy : ° 7 CBP 3— = coney 2. dle preetabor ings d ' S Net factor Payperencts i ‘ E 1: SD axtees beox data on * ; ori el | Souxter, tan ‘lata ‘om pred”) the Preal™ meaotine - : i J | Minus the AVMllome meaourne the SD. { 1 O& -+ve $b means +hak \nteme measure aol | Up +o Ness tan tne pred” menoure. wee ND + sp) = Nek Naberad Product 2. , Deb” b— also known ac comapr fixed Gp. a8 | the Value vA the Gap. thak wears cut during the period aver which he economic act! % beng meaoureed. Pep 1s subtraetect go total ia Grose Income: to ative at net Income. Net Income = Gries Intome — bef or. Net Income + dep” = Greee Income, 8 ay GNP = NNP-+ Dop”’ NNP = GiNP — Pep” 3 Nek fachr Peepmentt |—To ge {vom GNP te GDP, we |( ee have do Subtme- ned 4 NEP. foc on Poi necate fiom ays . Fsivate Seeber ® Govt Seetor Income $— Economic Aci UE the com of, ap received Weis pcre. wn am ecod Th come. receives can be divided unto +wo ‘ catenories +) ive Mie yw 6. Govt Lecter. Tetad Income. = Income received by pvt Sector CHHe o£ byoinestes ) es + Income received by lovt tector’ ( FeclesaD, state ¢, loeaD hove) For && | Sin trying de prealich the pb for cemronmer Greets focusing’ om the ureme available to ne prtvake certer might: be more woeful Haw focusing, | the untome f ne. eto oa a. wlio le. - ih THe Income. the private, tector , > Ge Rt disposable sneome > Pe ae a cwailable bo Sper Unceme, che pvt Seckor hao aan, ae Dispetoohe Lo of psivate Sec ' earned at home(Gne) equals private Sector's ‘| go epee | dd Ghaead (NER) ; plas mnareren Sher Chram fea, ve Sector ia Ope 7 er pa Yo of gor, debk /INT)» mi ger’. , ttk USCA 4 Pu} Sezing mead 1 "Vow Is py+ $ cong Crs. ra an edo pel 4 vse LiPvA Sawmg ag weed! to ford “new cap invslt, proviale— a nesqaitstes - ol A govt basi fo finance p46 | budget dlefigrts A466 tine Vaosvle fiero or lasot: te Geretgnes Te clenive an imbest \deukity Hla Allstate A uses 3 Pvt Lag, pwe isk woe dA Income: -exp.4 Henling SubsHied c+ f+ tanh fer Yom. the: expreesi ne riahonal Saw oT pare NE age 2G) as = (eatin nD eis CHG x tab G NK =P ot ME. - ~ “ oa ges net! eee a met pees eas fron absead Crtienk account balance. An srcheogen Ger caanentliy ae pie Vee oe produced ASS ( ymetusld : grter Zesvices), ia aaa A ampacrenes P seqraewcts le plbp by lama ead Soe Titec Now f= Sow + Lge : Smt =.S- Spe ant TF) ENtiCAin S govt FT t (-Sgove) + OAi oP) where —Saoy 1S budget oleiect 2465 ay adie At, TE eda bet shat an ecod’ s Pte Sawing IS copy Mn 3 Ways os i). — Pie | Usesre \ Ae \nvett (dD: — Pram bocow from pvd favere to - A tonct™ & puchace ‘d mew Cap. dnehatig ! recidential py J Inwentiry Invite * d 1 D2. The Got bul E olefieit(- $ po! “When the. gow rona A BP (80th Coy 4! ahve oh Saat ls tre), ak miwot ‘bertow aye: aNere Lo ial: cliqterernce tot. Dub hages @ reeetple. S._The cuscent Ale sbailhee eas} When: tv ; eee balance 16 +e, sa es = rot v oO ne aed i a Feasts Vpoweben either Benen dem Us i Savers pr Sel tp yo Savers” some their adteke, puch ois: and, fadstonies, Stock! af bonds. Thi fr he tisenk Me babsace ata ure ~ fe as Pyb.Sawings fF Viceversass \ j . ge vs iifcent Ent payment y to fo neces ore. WwOrer “US: PF errs > fore pres excess payrmenls ; over pes UL muot ' par ad SE i forotgners ar sel/ fo | foes vt tom US ~ «Th Ane care fs - woe thecy~ i Sowing to Aewol +0 vs, 08 fo accuree US asset. | peat ra & Wealth }— Sau te aoc ely slated -fo\ rake “4 weallt ; wlation + ! | Btreke é Flowe! — ‘ep “a vations ype A. lef 4, Meome \£ Sav) are meaowved For ont ‘of hme Co ex, Pex quater or pée sea):5 CE br ex, inniad Gop hae menouire a ceeil' Is. preel” per , Vestndbtay. that an mers called * ow VAUak ter wréol ° a ne ae ee ane is Stock variables are olesined lat A pt in Tombs Ex S- Amt “4 one nN gow bank Afe on Sept | eee do the! tof? vehuwe od. alli hoinses “th oe us ‘on en T) 2012+ Jn fae of chttge aah a i Womaembre IS the. ta un a Stock “Vasiahle- A Arasteven fe ial. bath tit with iwates > Lovo) n4som a! Cots d 7 mel ame pee at eo 2 Momenk 18) a Stock Wertable: Te unite of a, tive eiinegeoe ly. einer aes don!b ve Bellen repeats - nitteadend “ita. 7 ie ae cae Aang Win eaten aie L = “4 ae re Late He eAch over 10 “riven, a aie Way tha hie so & etock U Waker In Q bath deh are. related i { The Weakth ° 0 oy ecoyiom)é' one (a LH, fm Poe es catlleA net worl, YS te aadele tke thy theak 7/0 ~hE) Minus: pte head, Litt x © Wha TE Ones do Ofte4 Unite)» eo LEK i wAdhidcalal. ins iolellady ale a ptira fine. sth a Stock Menta bd nine—— 4 2 Ww 2) Saoweg ie Meaouted in. olollane PAUnIt hme 2 Is ad How pate: Beoz Saving takes the Apap w AN actumulation 9 aoseds or a Unwd m Le Hitiead, Chr ex, IP tani vied Ho pay off debis), It aolde to wealts, not a Fede” J ire a bettas oe Sbock, of wa 0 Naboual Wealth !— - CNW) te ol total wien oft Hh plead ci ol face 4 ey S comes hi a Q Ae are ¢ sed) OF Beek Sema ade net foreuy The Net foretgn: angele. t= Chale fy anes ‘4 Che Sib bonols. d. factones — = \\. 6wneal bg _domesticones| dents) ' yin ed S. minud ‘ats foreign clabilities +. 4 fp Ciclomeste. Phiwreae: fanamerrd assets ned a fe erg). Nek foreign ar ot —alakienal oe Oz 20n: > foreigners 4 hrs They repecent fey oe 4 coment deat 0 md Nw can A yn 4wo wage ree me: VY) The value © dhe exigby “notes or Lith tities thot make vp. natioral forex, d daamate em 4, “tet es alg ages, el US NW, _ The weartny mut or clef” = seb aovels, Oleh aaeaeorenle, te. a hop - nat Value se hove nowt ‘ ia A\W oe tins i Madored Sav) See ver amy partiular pd Amey with: the Vvalte, 4 exis bing aoeeke w Tsp thes held conotant, eal, eleva olollas of National staatiby adda a loll be Nabbral wealth:4 Teak is, S= T+ca: THe e9" showt drat Nabenal Cav QVsea !— ae TW 40 BRA ator “4 clomes bre phe: Spon re 2) jo DN dhe natinle stock net fo uy derole ners Or Aequiring nantll wate oe +o +he eukvent fit Bvt each clotlas by which domestic Phystaa) acsrete or met med. fersyn oascts & Ms a dollar by whieh” nahoral weave a we claimed, tea yn’ Natiovrnd Saving Ber above) wealth colar by dollar! Ee !- d more papi at pel g Naboral Caving, of mene. guselly ob ¢ tock 7 boned Wealth will rise, Reol App Pree \dexes £ np” eed Aah icone app, exp, Income, nohonc) wealth 4 savi thak wee oliseussed ane mearined m terme eCLugent met Value Such variabler are catledi nominal varizbler » Howewer’ Sai Gee eae nomic act? tn nominal. TERING aires yer +e compare’ d values GPO tonemic_ vi due Gop at P Aedt pes 20 Ames Read Gpp } — Ecomomists ve _deviced mettrodc breaking clown ce wun _Nompral_ Vatiableg nto oy pani see Ack an Physical Gtiee Yb the part ontog choos sun __ peices” ae fs os" a Pre & Pate Daa qr Ye 2 LAfem wipe is : I leo y. ig fAodout (O44) + neh =; ii ere -iPrcey t= Combe $ Jocvfe. 46e0/e — Soy. Breyer J ro0]6 4240/8 20 Valuer l= Cor 46000 4 6e00 won Broyles $ YoowO $bep0et. Pt D7, a) weal Ble reyTe B.S h nomial GPP clecint Teen 4 A physical o)p ora yar AK a tf Changer unm both G Grol Pres. \ nets ged An b Orkpo t- LS 4 How: mveh of. of YB OA Bon ty, ihobn nail el p- Ay Atrabita ble “toan GN tn physical olp é : Woe To remove effects ef price. charges, aoe price q bace rae Say fe a YWrods Bose J ema Cussent Oty oe 4 Base "o> Paces ° Yeax 1 Combs: = Bicycles | Yr 2 = Base Yn. aaeane » Totecl a eso 4-4eaon) Cp soo, be Bye als 1h Cussent! Oty is 4 Year 41 pula Z oe S axe Cieyelen \ 22-60 Yeahs 2 \ ; S. ulo Mp Bicycles DSO Xf 240 =f beer ' Tolal = 466,007 Ye Groth of read Gpp = 66,e00- $s) end) / ($5,000) Sp Gna of Ct bap} pias aa aN ELONOMIC varlable sat \s meacureol by prices, of Qa hase ye te called a real varube. Read Econome vasiables meaoure spe physvenl Ory x LCOnOmIc act,= ee GDP, & alo called lnabawt dollar GDP, soa the phi sicaD yok @f an eeol’s Jinel pred” vena — ol paces °| a hace ve G 1s Nommad Gpp, tle cated cursent ololler GDP, Le te 1 olollas. eal ef an ecod's final o/p Nenotaad a | bee Cdeent mkt. prices: 7 Note !— Valece of Rael DP en fp Sb U4 dame a Value 4 Momma! u Reason! —- Beoz Cumsent prices rs hace pncet ax the dame wun the bace ys, real £ mrominad Valet are alwarys the Lame ia d have Yr: Pace, Sendexts "—— a ‘ rE A Pree luelex oi a meaatere ofthe. ang: te hove | priceg come sperified set AG £S> elas we preee an a _specified base Eee for er , Swe deflator 4 At @ pree tn undex thal measutes the everall™ Level oe ee Opp kta defined | Eyre fSrmala wie ~ read GBP Ce mnowsinad &OF/ C.GDP Aeflater/Jo0) Tre Gop cleHater = leo X Nominal 4pp) neal Gp p. Ta Yr 2 (hace yA?, nominal Gd? Real Gor ane equal Lo the GBP deflator eguall [o0: GDP vel et) = 1.00 XE 4 E000 | 4 4e,0e0 = 100. 7 DP, ole alve ual, 160 th of yarie pos te aOR Tar 2, neural ane is. $ troop BT Pe a ‘Real IS £62000 ;re : Se, ODP pelea = joo & boro ] 62,000 (4r 2) = 1065, which 16 657 higher than d value of GoP dep 1 wn nf Fe Pnees, ao nreaourect Thus, the ovegalt Lercl © , aes G@pp defi" 1s as nce ; U gran oun tng 4 Ge aenaneene ef real GDh GDP Bef © clepenels on a Choice of a hase year GpP Defi f 1c a menoure 4 perce engi?) aleflakrer~ pet & Specific base yr. Hels = a The Conoumes Pree Index 2 a as The Gp Depl* measures 4 G aS Aner The ceL wacaounes oI a pees. a Compasses Conds: Unlike the QppP Deflator, Which le calerctated qrestesly, + CPI Us _awailate raonthly: ——— E The nia br slabshee conctucts of CPI: Tb inclioles cussen’ prec raed « Pye Lit or e OO baoket toneumes-G 4S Suacluolé "g raat wag Specific items of food, chotbing fucn 2 Toe CPL i that month Le tren carleulated_ Clursecet-ye r CPL = Cost of Mice baoket in Ete ". ay Fen a eee ea ye sein = Cota table Had“ rgh : nl Magni leas ee ee ee Oe ingv - ST toed Pree HEN mr Infieben §— ac An Mmyportint vasable that 1¢ meagired — nr Price andexee ts the Anfilation rate: Tre tnfla tien Pate Ccualt the fs Aate 4 ® in the pace under per pal. Tans, lf the GDP cteptfeor ices Wo un one year to 4 05° the mexl , the uflabon rate, between sie 4S ges C le —le0) /rgo = Sfieo sore sy. per é Tyee the Srl ys Cpe Deptt jo M2, A nfl” rate bry 4 3 rye “A C122 Jos los. =H fies = + 0667 =64EL pec yee TF Pow p brelk un pad Sfp pes Ne Ta w +r1, - A Ingf” me pew + 2 ttl Oe Ay, ae te Whore” mea a Puy Py tial peta a to t+] o” fhe) Tat Rates! — An dunk rate ue d Late 4 refun promused by Q berrewer 40 4 tender Ue E ( Ae ean us 3 spec heuleiee tae peal i ty Alea $108 bre yr fim nen PPE Ibe placa repiag mend L ee 3 | ; A panty A eco, Lith rakp olitf alt rele un A 2eot. [Feve eet Ww As Ain oA borrow Ae "dhog of Porelk ar bexsewed for pothle }, ane P apr Def. a" “y bboer 163,00 Sy (ay ee A eco te file shoved fy Taras pal we are ahi many angels ; Ther ” cpecified whe 5 retin: Corporate gfock that ole vel pUf ay peer botclers o rate of a pic b. 4 L Chaves of ebock , refuan Comes : q dividends Gp grins (Fa A value Oo res pikd Pace). , ge) Ve NomindD Intt Rates | (kr) CNT). &i-_A re ALC ankt_cule YL per foo 0 ae 7 a nt den of Ay ol saving 440 — AG “ord to phic a a . Ww at hea) for depose = era. oe a Ty unph 15 Pe ree ge whale Goat f 20 ame 0 -earbion mer core $BI2 g tn reap teams A se Ac IS. Bk? _IWbtn _1N0_mMere declary Prox uk Wad ro ; "6 distrrguitsh Ree ee ee a an nomena relue, Cronremic® frequektty vce. read /nbt rate. '