Measuring the Economy 1: Introduction and Summary | SparkNotes Shakespeare Literature 2/16/22, 8:43 PM Other Subjects Teacher Blog Search Help Measuring the Economy 1 Economics Study Guide Topics Terms and Formulas Further Study Summary Introduction and Summary Macroeconomists use a variety of di!erent observational means in their e!ort to study and explain how the economy as a whole functions and changes over time. One such method relies on personal experience. It is relatively simple to notice that your company is producing more than it has in the past or that a paycheck does not go as far as it used to. Yet while personal observations do provide information about the economy, that information can often be localized rather than universal, and may not accurately reflect the state of the economy as a whole. How Literary Characters Would Break Up With You Over Text | The SparkNotes Blog In order to move beyond the limitations inherent in personal experiences, macroeconomists begin by systematically measuring the basic elements of the economy in order to derive standard and comprehensive statistics. This data provides information about the entire economy rather than simply about a single household or firm. Two of the most fundamental elements macroeconomists study are the total output of an economy (GDP) and the cost of Take a Study Break living within an economy (CPI). Gross domestic product, or GDP, is an indicator of economic performance that measures the market value of goods and services produced within a country. This measurement is of great importance to consumers since it also equals the total Every Shakespeare Play Summed Up in a Quote from The O!ce income within an economy. The consumer price index, or CPI, is a cost of living indicator; it measures the total cost of goods and services purchased by a typical consumer within a country. This index allows economists and consumers to see just how much purchasing power a dollar yields, and to compare that power between di!erent years and eras. Together, GDP Every Book on Your English Syllabus, Summed Up in Marvel Quotes and CPI show how much income exists within an economy and how much this income can purchase. A Roundup of the Funniest Great Gatsby Memes You'll Ever See QUIZ: How Many of These Literary Jeopardy! Questions Can You Answer Correctly? https://www.sparknotes.com/economics/macro/measuring1/summary/ Page 1 of 3 Measuring the Economy 1: Introduction and Summary | SparkNotes 2/16/22, 8:43 PM Advertisement The concepts of GDP and CPI open the door to a scientific understanding of the functioning of the economy on a large, or macro, level. These are the most basic tools of measurement used by macroeconomists, policy makers, and consumers to understand and describe the economy. In fact, GDP and CPI are published and discussed regularly in the media. Through understanding the concepts of GDP and CPI, the world of macroeconomics begins to unfold. Next section Gross Domestic Product (GDP) Sign up for our latest news and updates! First Name Last Name By entering your email address you agree to receive emails from SparkNotes and verify that you are over the age of 13. You can view our Privacy Policy here. Unsubscribe from our emails at any time. Email Sign Up The #1 FREE study site for students Most Popular More Help No Fear Shakespeare About Find Us On Literature Guides Help Other Subjects Contact Us SparkNotes Blog How to Cite SparkNotes How to Write Literary Analysis Advertise Accept All Barnes & Noble uses cookies to o!er you a better user experience. By clicking “Accept All Cookies” you agree to the Cookies storing of cookies on your device in accordance with our Cookie Policy Copyright © 2022 SparkNotes LLC https://www.sparknotes.com/economics/macro/measuring1/summary/ Reject All Cookies Manage Preferences Terms of Use | Privacy | Cookie Policy | Do Not Sell My Personal Information Page 2 of 3 Measuring the Economy 1: Introduction and Summary | SparkNotes https://www.sparknotes.com/economics/macro/measuring1/summary/ 2/16/22, 8:43 PM Page 3 of 3
