Page 2: The Circular Flow of Income

This page explains how the circular flow of income works and different methods of measuring national income, including real and nominal GDP calculations.

Definition: National income represents the total value of goods and services a country produces in one year.

Highlight: The circular flow model shows the continuous movement of money between households and firms through the exchange of goods, services, and factors of production.

Vocabulary: Gross National Product (GNP) measures the market value of products produced using labor and property supplied by a country's citizens.

Page 1: Macroeconomic Objectives and Measurements

This page introduces the fundamental macroeconomic objectives and their measurement methods. The four main objectives of macroeconomic policy are outlined alongside their respective measurement tools.

Definition: Real GDP measures the quantity of goods and services produced in an economy, adjusted for inflation.

Highlight: The four main macroeconomic objectives are economic growth, minimizing unemployment, price stability, and maintaining a stable balance of payments.

Vocabulary: CPI (Consumer Price Index) measures household purchasing power, while the Claimant Count tracks unemployment benefit claims.

Example: Balance of payments tracks international transactions - when a country exports cars worth $1 million and imports oil worth $800,000, the balance would be +$200,000.