The Underground Economy

The Underground Economy The gross domestic product misses many transactions that take place in the underground economy. Searching for the Hidden Economy Here is the brief, unremarkable story of how I recently “line 10 participate in till’ underground...

GDP Lightens Up

GDP Lightens Up GDP measures the value of the economy’s output of goods and services.What do you think we would learn if, instead, we measured the weight of the economy’s output? From Greenspan, a (Truly)Weighty Idea Having weighed the evidence carefully,...

REAL GPD OVER RECENT HISTORY

REAL GPD OVER RECENT HISTORY Now that we know how real GDP is. defined and measured, let’s look at what this macroeconomic variable tells us about the recent history of the United States. Figure 2 shows quarterly data on real GDP for the u.s. economy since 1965....

THE GDP DEFLATOR

THE GDP DEFLATOR As we have just seen, nominal GDP reflects both the prices of goods and services and the quantities of goods and services the economy is producing. By contrast, by holding prices constant at base-year levels, real GDP reflects only the quantities...

A NUMERICAL EXAMPLE

A NUMERICAL EXAMPLE Table 2 shows some data for an economy that produces only two goods: hot dogs and hamburgers. The table shows the quantities of the two goods produced and their prices in the years 2005, 2006, and 2007. To compute total spending in this economy, we...