Topic Six

What is the State of the Economy and How does One Tell?

Required Readings:

  • Waymaker¬†Module 4: Macroeconomic Measures of Performance
  • The Wall Street Journal

Additional Readings:

  • Roy Webb, “The National Income and Product Accounts”, in Annual Editions: Macroeconomics 90/91.
  • What’s A Dollar Worth?¬† (Look in the right sidebar, near the top)


  • You should be able to explain the following concepts in your own words and understand how each concept is measured:
    • Gross Domestic Product
    • Price index
    • Inflation
    • Unemployment rate
    • Misery Index
  • You should be able to explain the difference between a real and a nominal variable in your own words, and understand when each is appropriate to use.
  • You should be able to give a reasoned judgment about the state of the economy.

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