Economic Sum Essay

3559 WordsFeb 26, 201215 Pages
ECON A232F Introduction to Macroeconomics Course Summary Macroeconomics Macroeconomics Data Money and Prices in Long Run Real Economy in Long Run Short Run Economic Fluctuation Nation’s Income Open Economies Macroeconomics Cost of Living Production And Growth Saving, Investment, Financial System Monetary System Open-Economy Macroeconomics Basic concepts AD-AS Model Money Growth And Inflation Monetary Policy And Fiscal Policy SR Tradeoff between Inflation and Unemployment Unemployment and its natural rate Open-Economy Macroeconomics Theory Net Income from Abroad (NIA) = GNP (Nationality) - GDP (Domestic) Excluded Items 1) No Market value 2) Illegal Activities Open Economy (With External Trade) Compare Nations Output Standard GDP =C +I +G +(X – M) Nominal GDP Real GDP Closed Economy (No External Trade) Excluded Transfer Payment (No production) Measured GDP at CURRENT market price Measured GDP at CONSTANT market price (No price Effect) Net Export = Domestic Export + Re-export - Import Exercise • If the property developers insisted on demolishing the Hunghom Peninsula estate and rebuilt luxury residential units on the same site, what would happen to Hong Kong’s GDP? (4 marks) Exercise Answer • If the property developers insisted on demolishing the Hunghom Peninsula estate and rebuilt luxury residential units on the same site, what would happen to Hong Kong’s GDP? (4 marks) Answer: • If the property developers insisted on demolishing the Hunghom Peninsula estate and rebuilt luxury residential units on the same site, investment would increase, which in turn raised Hong Kong’s GDP. * Cost of Living * Why do we need to know this? How to MEASURE the cost of living? Computation Consumer Price Index GDP Deflator Formula Applications Macroeconomics

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