Introduction to Macroeconomics Summary PDF

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Jun 22...

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Macroeconomic is the study of aggregate economic behavior. In Macroeconomic we analyse the principal determinants of an ecomony level of income, general level of prices, and growth of income. Model Building Household (consumption) Business (investment Goverment

Aggregate spending

Value of goods and services produced

International (net export)

Y = C + I + G + (X– M) Yd = C + S Y = Aggregate Income Yd = Disposable Income C = Cosumption I = Investment G = Government X = Export M = Import

Real sector

Monetary Sector

Commodity Market (Pasar Barang)

Money Market (Pasar Uang)

Labour Market (Pasar Tenaga Kerja)

Capital Market (Pasar Modal)

GDP = PDB The production approach Looking at the economy as a production process (down the first column), the economy in producing an output of 100 generates newly additional value of 30, which is called value added in the economic literature. This value added (which in this simple form is equal to GDP) is obtained by deducting from the value of output the cost of goods and services used in the process of production (i.e.100-70=30). The cost of goods and services used in production (70) is called intermediate consumption or intermediate inputs in national accounting literature.

The income approach GDP can also be obtained by the income approach, i.e. by adding together all types of factor incomes generated in the production process, such as: · wages and salaries and bonuses and other compensation payable to employees; · taxes on products and production payable to the government; and · operating surplus for the producers.

The expenditure approach The last approach shows the sum of goods and services used for final consumption, gross capital formation, and exports minus imports....