by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Nominal GDP Price Index?Nominal GDP Price Index is an index used to convert historical GDP numbers to a present value. It is a price index is a two-digit decimal number like 1.00 or 0.85 or 1.25 (though, for ease of use, it has traditionally been...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How to Measure GDP?GDP can be measured based upon what is demanded for consumption or based upon what is produced. Since every market transaction must have both a buyer and a seller, GDP must be the same whether measured by what is demanded or by what is produced.GDP...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
Why is Tracking Real GDP Important? Real GDP is important because it is highly correlated with other measures of economic activity, like employment and unemployment. When real GDP rises, so does employment.The most significant human problem associated with recessions...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Ladder of Opportunity?Economic inequality is perhaps most troubling when it is not the result of effort or talent, but instead is determined by the circumstances under which a child grows up. One child attends a well-run grade school and high school and...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Tradeoff between Incentives and Income Equality?Government policies to reduce poverty or to encourage economic equality, if carried to extremes, can injure incentives for economic output. The poverty trap, for example, defines a situation where...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What are Macroeconomic Frameworks?As you learn in the micro part of this book, principal tools that economists use are theories and models (see Welcome to Economics! for more on this). In microeconomics, we used the theories of supply and demand. In macroeconomics, we...
