Chapter 13: Measuring the Economy's Performance

Businesspeople, economists, and politicians often need to know how the economy is performing. Chapter 13 explains key statistics, indicators, indexes, and models used to measure the economy's performance. Terms defined include gross domestic product, net national product, national income, personal income, and disposable income.

Coffee for a Nickel?
The rise in prices over time is called inflation. The chapter examines the effect of inflation on purchasing power, and it discusses how consumer and producer price indexes and real GDP are used to measure changes in average prices. Also included is an analysis of aggregate demand and supply and equilibrium price level. The chapter finishes with a discussion of business fluctuations, from peak to trough to recovery, and the major causes and economic indicators of these cycles.