INTRODUCTION TO BASIC MACROECONOMICS CONCEPTS 1

There are 2 branches of Economics:

1.) Microeconomics – is the study of individuals households and firms behavior in

decision making and allocation of resources. It generally applies to market of

goods and services and deals with individual economic crisis.

2.) Macroeconomics – is a branch of economics that studies how an overall

economy-the market systems that operate on a large scale-behaves.

Macroeconomics deals with the aggregates, specifically with measuring

economic activities. We measure aggregate output to determine if a county is

improving economically and showing potential in economic growth. This further

studies economy wide phenomena such as inflation, price levels, rate of

economic growth, national income, gross domestic product (GDP) and changes

in unemployment.

Metrics in Macroeconomics:

1. Gross Domestic Product (GDP) is the summation of all goods and services

produced in a specific country. It does not include factor payments from

abroad. It is the total monetary or market value of all the finished goods and

services produced within a country’s borders in a specific time period. As a

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ECONOMICS, TAXATION AND AGRARIAN REFORM BY C.MANAPAT & PEDROSA
 broad measure of overall domestic production. It functions as a

comprehensive scorecard of a given country’s economic health.

GDP of the Philipines is $356.814 billion (2019).

Per capita income or average income measures the average income earned per

person in a given area in a specified year. It is calculated by dividing the area’s

total income by it’s total population.

Per capita GDP – is a measure of country’s economic output that accounts for its

number of people . It is divides the country’s gross domestic product by it’s

population.

GDP per capita is expected to reach 3000 USD by the end of 2020 accdg to

Trading Economics global macro models and analyst expectations.

2) Gross National Product -is an estimate of total value of all the final products

and services turned out in a given period by the means of production owned by a

country’s residents.Thus, it is GDP plus a net factor income from abroad. It

further

measures the monetary value of all the finished goods and services produced by

the country’s factors of production irrespective of their location.

GNP per capita is another measurement of growth, where the national income is

divided by the total number of members in a population.

Phil population 109,581,078 billion

In computing for growth, one may use current or constant prices. Using current prices

means that the figures computed to measure GNP/GDP come from the current year,

while using constant prices means that a specific year was used as basis for the price

level.