CFA Notes - Economics - II

Note

I.

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（2）

（3）

（4）

（5）

II. GDP

（1）GDP

i. Definition

Gross domestic product（GDP）measures: the market value of all final goods and services produced within the economy in a given period of time（output definition）or, equivalently, the aggregate income earned by all households, all companies, and the government within in the economy in a given period of time（income definition）.

ii. Case of GDP

1. 列表项

iii. Components of GDP

GDP = 消费 + 投资 + 政府采购 +（出口 - 进口）= C + I + G + (X - M)

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（2）Export

i. Definition

Export means sending of goods or services produced in one country to another country. The seller of such goods and services is referred to as exporter; the foreign buyer is referred to as an importer.

ii. Case of Export

$2007$ 年各国出口情况
Title : Exports as a Share of GDP, $2007$

Source : World Bank, World Development Indications and OECD Stat Extracts

（3）Import

i. Definition

An import is a genoods brought into a jurisdiction, especially across a national border, from an external source. The party（当事人）bringing in the good is called an importer. An import in the receiving country is an export from the sending country.

ii. Case of Import

$2016$ 年中国进口集成电路的总额

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III. Inflation

（1）Inflation

Inflation refers to a sustained rise in the overall level of prices in an economy. Economists use various price indexes to measure the overall price level, also called the aggregate price level.

（2）Inflation Rate

The inflation rate is the percentage change in a price index- that is, the speed of overall price level movements.

（3）Hyper-inflation

Hyper-inflation is an entremely fast increase in aggregate price level, which corresponds to an extremely high inflation rate - for example, $500\%$ to $1000\%$ per year.

（4）Stagflation

If a high inflation rate is combined with a high level of unemployment and a slowdown of the economy - an economic state known as stagflation（for stagnation plus inflation）- the economoy will typically be left to correct itself because no short-term economic policy is thought to be effective.

（5）Deflation

Deflation is a sustained decrease in aggregate price level, which corresponds to a negative inflation rate - that is, an inflation rate of less than $0\%$

（6）Disinflation

Disinflation is a decline in the inflation rate, such as from around $15\%$ to $20\%$ to $5\%$ or $6\%$. Disinflation is very different from deflation because even after a period of disinflation, the inflation rate remains positive and the aggregate price level keeps rising（although at a lower speed）.

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IV. Unemployment

（1）Unemployment

（2）Frictional Unemployment

（3）Structural Unemployment

（4）Cyclical Unemployment

V. Business Cycle

（1）Trough

Trough is the lowest turning point of a business cycle.

（2）Expansion

The period of expansion occurs after the trough（lowest point） of a business cycle and before its peak（highest point）.

（3）Peak

Peak is the highest point between the end, of an economic expansion and the start of a contraction in a business cycle. The peak of the cycle refers to the last month before several key economic indicators, such as employment and new housing starts, begin to fall.

（4）Contraction

Contraction is the period after the peak and before the trough.

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