Chapter 23 Journal

Chapter 23 is the introduction of Macroeconomics, which is the study of the bigger world problems such as inflation, unemployment, etc. The first topic Mankiw brings up is gross domestic product or GDP: the sum of the money exchanged through the buying and selling of goods and services in a year. This amount is calculated using the final market value of all the goods and services, it can be split up into four main categories: investment, government purchases, consumption, and net exports. The chapter also goes deeper in the usage of GDP and talking about nominal GDP, read GDP, and a GDP deflator. Nominal GDP is using the market value of the goods and services which real uses the constant base-year value to calculate GDP. The GDP deflator the calculation from the ratio of the nominal to real GDP, which measures the the level of inflation. GDP, however, is not perfect and excludes many important details the economist should consider. This chapter was slightly different from the concepts in microeconomics so the I would give this chapter a difficulty rating of 2.