LEARNING OBJECTIVES
After you have read this section, you should be able to answer the following questions:
- What is the measure of total output of an economy?
- What is the difference between real and nominal gross domestic product (GDP)?
Macroeconomics is data driven. Government statisticians and other organizations gather vast amounts of data on the performance of various aspects of the macroeconomy, and macroeconomists try to make sense of all this information.
If we want to explain economic data, then we first have to get the measurement right, and a big part of this is ensuring that we get the accounting right. To make sure that we do, we begin by constructing simple examples. This is not because a simple example is enough to describe an economy; but because cannot hope to understand the complicated accounting unless we do the simple accounting correctly.
- 1393 reads
