Gross Domestic Product (GDP) - Percentage change of total cost service/product consume by - Human capital

- Total Value of goods & service in a nation with in certain time. people. - Physical capital  raw material
- Representing the economic power of nation. - Measuring the level of cost spending by people / household.
Financial System :
GDP : C + I + G + NX C : consumption of house hold CPI : Price of basket of goods and services - Saving, Investment ( Bond / Stock)
I : investment  housing, NX : net export x 100 - Financial Crisis 2009  Unemployment:
G : government purchase Price of basket in base year - Natural
 Government project - Cyclical  Money growth  Velocity of
 Export & import 2007 ($ 1 x 4) + ($ 2 x 2) = $ 8 * CPI: 2007 = 8/8 x 100 = 100 money
2008 ($ 2 x 4) + ($ 3 x 2) = $ 14 2008 = 14/8 x 100 = 175 - Frictional
Nominal GDP : - Value of goods & services 2009 ($ 3 x 4) + ($ 4 x 2) = $ 20 2009 = 20/8 x 100 = 250 - Structural
- Financial Intermediaries :
Real GDP : - Value goods & services Inflation rate in year 2 : CPI 2 – CPI 1  Banking * Mutual Fund
x 100 Labor Force : employment +unemployment
CPI 1 *adalah usia produktif kerja di Indonesia yaitu usia 18 s/d 65 thn
Price of Quantit Price of Quantit
Milk y Honey y 2010 Unit Price 2011 Unit Price Labor Force Participation Rate : Labor Force
2010 $1 100 $2 50 100 $ 200 75 $ 225 x 100
2011 $1 200 $2 100 Cauliflower Total Adult Population
2012 $2 200 $4 100 Broccoli 50 $ 75 80 $ 120
Carrot 500 $ 50 500 $ 100 Unemployment Rate : Number of unemployment
 Nominal GDP : x 100
*Base Year 2010
2010  (1 x 100) + (2 x 50) = 200 Labor Force
Question : A. Calculate Price 2010 & 2011
2011  (1 x 200) + (2 x 100) = 400 B. Calculate CPI 2010 & 2011
2012  (2 x 200) + (4 x 100) = 800 Velocity of Money : V = P . Y * P= Price
C. Calculate Inflation Rate 2010 & 2011
Y = Quantity of goods
Answer :
 Real GDP : * GDP Deflator : M M = Amount of money
A. 2010 2011
2010  (1 x 100) + (2 x 50) = 200 200/200 x 100 = 100
Cauliflower 20.000 16.875 Ex : Male Female question :
2011  (1 x 200) + (2 x 100) = 400 400/400 x 100 = 100
2012  (1 x 200) + (2 x 100) = 400 800/400 x 100 = 200 Broccoli 3.750 9.600 1. Not in labor force : 60 million 70 million A. Total Population
2. Unemployment : 24 mil 17 mil  (60 + 70) + (24 + 17)
Carrot 25.000 50.000
3. Employment : 156 mil 183 mil + (156 + 183) = 510
 GDP Deflator  Determine level of price in economic activity + +
GDP Nominal Total Price  48.750 76.475
B. Labor Force  (24 + 17) + (156 +183) = 380
= x 100
GDP Real B. 2010  48.750 2011  76.475
C. Unemployment Rate  (24 + 17)
x 100 = 100 x 100 = 156
X 100 = 10,79 %
 Inflation Rate  GDP deflator 2 – GDP deflator 1 48.750 48.750
380
x 100%
D. Labor Force Participation Rate
GDP deflator 1 C. 156 – 100
 380/510 x 100 = 74,51%
x 100 = 56 %
Ex : 2012 – 2011 200 – 100 100
x 100%  x 100% = 100% The Real Exchange Rate
2011 100  Real exchange rate: the rate at which the goods & services of one
Productivity Function
country trade for the goods & services of another.
- Natural resource
Cost of living - Technical knowledge  technology utilization
 Real exchange rate = e x P
CPI ( Consumer Price Index) - Amount of research by worker every hour
P*