ipl-logo

Naked Economics Chapter 2 Study Guide

1296 Words6 Pages

https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038

The definition of GDP:
Gross domestic product is how we can measure a nation’s economy
GDP can refer to the size of an economy, and it’s a great tool for comparing economies of different countries
GDP is separated into quarters at the beginning of the year. In the last quarter, GDP usually endures a sharp increase. Why?
How does GDP affect you?
People are more likely to spend when GDP is higher--consumers have more money
GDP is like a mountain range- it goes up and down sometimes

Components of GDP:
Consumption- spending by households on goods and services
Investment- purchase of goods that will be used in the future to produce more goods and services (ex: …show more content…

-------
“I am from Consumerville. We are a country of very small people. We live on this flower in peace.”
They lived in peace until Alex started to pick their petals.
“Please teach me about the economy.”
“Put the flower down. Let’s talk about GDP.”

Chapter 2: GDP
Alex did not know what GDP meant.
“GDP? Gigantic dinosaur party?”
All the Consumers of Consumerville laughed.
“NO, silly! Let’s start with economy. The economy is all the riches in a land.”
Alex imagined a big pile of gold and pizza.
-------
“Like money? And fancy things?”
“Yes, money! And all the things we buy and sell. From rye to bells and pies to shells!
Alex started to like economy a little bit more.
“So, Coco, where is the gigantic dinosaur party?”
“Oh silly elephant
“GDP is gross domestic product. Not nasty domestic product, gross.”
“GDP is how we see, how awesome a land can be!
It shows us all the riches we’ve got
From gold and silver to apricots.
---------
GDP is split in four
To show us all we have and more.”
“What’s GDP like in quarter 4?”
“Christmas time! No one is poor!”
Alex loved presents.
Alex: “I want to learn more!”
Coco: “Let me introduce you to two of my good friends who know a lot about the …show more content…

( an alligator that deflates nominal gdp with its sharp jaws)
Deflator-gator: Do you see my super-sharp jaws?
They’re just as bad as my extra-long claws!
Alex: I’m scared!
Deflator-gator: You don’t need to be.
I don’t attack anything but nominal GDP.
Your parents use me to see through inflation,
To find the real growth of a nation!
Alex: whew!
---------
Deflator-gator: Put nominal and real GDP in my mouth,
And the GDP deflator will come out way down south!
Alex: Eww, that’s Gross!
Jaylen: Why don’t we see this up close!
Alex: Let’s put a nominal GDP of f10 and a real GDP of 5 in his jaws.
(Picture shows $ signs.)
Deflator gator (looking all fat): I’m working on it, let’s pause.
(Picture shows a 1...2...3...then the rate of inflation flies out of its butt.)
Alex: Wow, thank YOU!
I never could’ve known the rate of inflation was actually TWO!
-----------
Coco: So, Alex, what have you learned?
Alex: GDP is a way to see all the parts of economy.
It shows its size and knows its shape
On items as small as seedless grapes
We buy and sell, export and spend make sure our riches have an upward trend.
Compare different years to see our growth,
GDP is how helpful? The MOST!
R: And with that, Alex never got an F on an economics test again.
Or an A.

Show More
Related
710 Words | 3 Pages

This quote exemplifies how America’s debt was no longer an embarrassment and people bought without concern for consequences. With a mindset such as this, it was inevitable that the day would come when the economy would face these repercussions of speculation. On October 29,

Read More
1189 Words | 5 Pages

Throughout the history of The United States the government has taken various actions to address the troubling circumstances with the nation’s economy. Two actions that addressed the nation’s ever so troubling economic crisis at the time include Regan Era Tax Cuts and President Franklin D. Roosevelt’s “New Deal”. These actions were proposed to society during two time periods where American citizens were facing an immense amount of strife and despair, the two plans offered hope and a plan of relief to the economy. The New Deal during “The Great Depression” and Regan Era Tax cuts which was during a terrible recession both provided a breath of fresh air during a time period where American’s and the economy were at an ultimate crisis and standstill

Read More
722 Words | 3 Pages

The economy is clearly trending in the right direction. The Federal Reserve is making the right decisions, President Trump seems to be doing the same. The article was quite the eye opener to say the least though. To be honest I did not think that the economy was prospering as much as the article makes it seem. The unemployment is low, inflation is slowly reaching the target of 2%.

Read More
1257 Words | 6 Pages

The economical situation of America has always been a hard solved problem for economists since the Great Depression. America’s economy is based on a mix of socialism and capitalism to make a mixed economy. Although, before the mixed economy, many economical decisions for America were based on Keynesian economics. This economic system was based in the concept that the government has to increase spending and demand to promote growth in the economy. These theories and principles were written by John Maynard Keynes and is a British economists who is seen as the founder of modern macroeconomics.

Read More
1377 Words | 6 Pages

a. What is the value of GDP in Macronia? We can measure GDP in Macronia as the sum of all spending on domestically produced final goods and services. Spending consists of consumer spending, investment spending, government purchases of goods and services, and exports less imports. ($510+$110+$150+$50-$20)= $800 b. What is the value of net exports in Macronia?

Read More
586 Words | 3 Pages

3. GDP per capita is more effective than GDP nationally because per capita is the total economic output of a country, divided by its total population. This gives you an idea of the output of each person in a range of categories such as each person’s annual income. This can allow the country to change itself in certain areas based off of these statistics. GDP only shows the economic performance of the whole country, mainly for the purposes of comparisons and competition with other countries. 4.

Read More
406 Words | 2 Pages

When discussing whether or not the GDP (gross domestic product) accurately measures the well being of a country, the textbook portrays that GDP measures the economy’s both total income and the total expenses on goods and services. The textbook also portrays how key figures in history, such as Robert Kennedy, disagrees with the concept of GDP being a “good” measure of an economies well-being. Out of his speech, the statement that gave me further insight to whether or not GDP is useful comes from his statement that proclaims “It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America except why we are proud that we are Americans”. Although GDP is useful in measuring the overall outcome

Read More
200 Words | 1 Pages

In the book, “Homer Economicus: The Simpsons and Economics”, Joshua Hall, evidently focuses on seeing microeconomics in a more diverse and fun way by relating it to the popular television show, The Simpsons. The book begins with explaining the construction of the plot. As a substitute professor, Hall wondered what he wanted his students to learn and how he was going to teach them. Shortly after showing multiple snippets of episodes in class, in order to better convey economics to the students, he realized there was a connection between microeconomics and The Simpsons. Students from his class were relating the show to their better understanding of material learned in class.

Read More
857 Words | 4 Pages

This is good news for businesses because an increased personal income accounts for an increased personal spending. As we become more aware of how consumers are spending their money, we get a closer idea as to how successful the business industry will operate as a result. Consumer spending is one of the most important topics when discussing the United States’ economy, therefore the economic environment is extensively influenced by how much people are spending everyday. This uncontrollable factor plays an extensive role in how the world of business is

Read More
1715 Words | 7 Pages

David Hume and Adam Smith have both laid down essential monetary theories that form the basis of macroeconomics today. The quantity theory of money and the labour theory of value explained to humans how money affects us in our daily lives. Most people do not ponder over this in detail, but thanks to Hume and Smith, we can learn more about money’s role in economics by reading their essays (of money) and book (Wealth of Nations), respectively. According to David Hume, money is not a subject of commerce.

Read More
1160 Words | 5 Pages

Then if the people get more money that also may raise the GDP. __ Reasoning (explain what the above textual evidence means & how it supports your claim) __ The reason that I used this piece of evidence is because it gives more reasons on how the people are getting more money back due to the fact of not having as many

Read More
1236 Words | 5 Pages

We cannot use the models that caused our crises to solve them. We need to reframe the problem. This is what the most inspiring book published so far this year has done. In Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Kate Raworth of Oxford University’s Environmental Change Institute reminds us that economic growth was not, at first, intended to signify wellbeing.

Read More
1825 Words | 8 Pages

INTRODUCTION An economic system is defined by the various processes of organizing and motivating labour, producing, distributing, and circulating of the resultant of human labour, such as merchandise and services, consumer durables , machines, tools, and other technology used as intake for hereafter production, and the infrastructure within and through which production, apportionment , and circulation occurs. These arrangements are intended by the political, cultural, and environmental conditions which they co-exist together (Gemma; 2014). In a command economic system or planned economy, the federal government controls the economy by deciding how the state would use and distribute resources. The government also regulates prices and wages

Read More
806 Words | 4 Pages

The demand on labor from companies and factories was increased as increasing business. World Bank showed, ‘The GDP growth rate jumped to 11.1 percent from 1994 to 2000(World Bank, 2004:13).’ With the increased GDP, the Vietnamese solved the problems of food and clothing. The Vietnamese economy achieved its highest economic freedom score ever in the 2015 Index (The Heritage Foundation, 2015). However, there

Read More
1772 Words | 8 Pages

Also, the benefits of the public good are enjoyed by all. The producers are able to better plan their production and consumers know when to buy. Macroeconomic variables act as indicators of the current trends of the economy like inflation or recession and anticipate their future trends. Some of the indicators of macroeconomics are as follows: - Growth: Economic growth indicates the expansion of the economy over time and is measured by the performance of the economy over the same period in the immediate past. For eg, the performance in a particular quarter of the economy vis a vis the the same quarter in the previous year.

Read More

More about Naked Economics Chapter 2 Study Guide

Related Topics

Open Document