Midterm Study Notes môn Principles of Management | Trường Đại học Quốc tế, Đại học Quốc gia Thành phố Hồ Chí Minh

GDP
GDP : total income / total expenditure of everyone in the economy market value
- tangible goods and intangible goods - currently produced - produced domestically - within a period of time
Y = C+ I + G + NX ( open economy NX # 0 )
Y = C + I + G (close economy NX = 0)
Interest in close economy : I = Y – C – G = ( Y – T – C ) + ( T – G )
-Nominal GDP : monetary units, use current prices and current quantities, not corrected for inflation
-Real GDP : measured in outputs, use base year price but current quantities, corrected for inflation BASE Year 2021 Product A Product B Product C 2019 $10 500 $15 600 $30 60 2020 $15 600 $40 700 $45 70 2021 $30 450 $60 400 $70 40
Nominal GDP 2019= (PA x QA)2019 + (PB x QB)2019 + (PC x QC)2019
Real GDP 2019= PA2021 x QA2019 + PB2021 x QB2019 + PC2021 x QC2019
Nominal GDP 2020= (PA x QA)2020 + (PB x QB)2020 + (PC x QC)2020
Real GDP 2020= PA2021 x QA2020 + PB2021 x QB2020 + PC2021 x QC2020
Nominal GDP 2021= (PA x QA)2021 + (PB x QB)2021 + (PC x QC)2021
For base year : nominal GDP 2021 = Real GDP 2021 ( )
% increase nominal GDP 2019 – 2020 =
Nominal GDP2020 – nominal GDP 2019 .100 % Nominal GDP 2019 (Real GDP 2021−realGDP2020 ) % .100 %
increase in real GDP 2019 – 2020 = Real GDP 2020 ( ) GDP deflator in 2020: Nominal GDP2020 .100 % RealGDP ( )
Inflation rate between 2020 – 2021:
GDP deflator 2021 – GDP deflator 2020 .100 % GDP deflator 2020
Real inerest rate = nominal – inflation
Change in Real GDP: there will be increase in P & S produced in the economy (outputs increase)
Increase in Nominal GDP : increase in price level and/ or increase in the level of production.
CPI: 1) Fix the baskets, 2) Find the prices, 3) Compute the basket cost, 4) calculate the CPI: 100 .
(cost of basket in current year / cost of basket base year)
Inflation rate 2020 – 2021: 100% . (CPI2021 – CPI2020)/ CPI 2020
Differences between GDP and CPI:
1) CPI: fix basket for G & S; GDP: current basket of G&S
2) CPI: include the import products, GDP: produced domestically
3) CPI doesn’t include the capital goods, GDP: include capital goods but only if they produced domestically
Saving, investment and government policies
1) Private saving = Y – T – C
Positive Public saving = budget surplus = T – G
negative public saving = budget deficit = G – T
National saving = investment = Y – C – G
Saving is the supply of loanable funds, Investment is the demand for Loanable funds 2 Higher interest rate:
+ Increase incentive for saving => quantity of LF supplied will increase
+ Increase the cost of borrowing the money => reduce the incentives for investment =>
quantity of LF demanded reduce. Unemplo
yment rate:
Employed, unemployed (don’t have jobs but still actively looking for job), not in labor
forced (discouraged workers, children < 16, prisoner, disability) Unemployed Unemployment rate = 100% . laborforce
Population = employed + unemployed + not in labor force (không tham gia Lực lượng lao động )
Labor force = employed + unemployed laborforce
Labor force participation rate = 100 . population
Cyclical unemployment: Base business cycle
1) Frictional unemployment (thất nghiệp tạm thời): people spend time looking for suitable
jobs that best suites their skills and tastes, expectation… short term
+ Reason lead to FU: sectoral shift (chuyển ngành)
+ Reduce the FU: Boost up the job search, promote the public training programs, reduce unemployment insurance.
2) Structural unemployment (Thất nghiệp cơ cấu): there are not enough jobs for workers, long term
+ Reason SU: Minimum wage, labor union, theory of efÏciency wages (firms voluntary to
pay higher wages to promote education, healthcare, reduce worker turnover,) Monetary system: -
Functions of money: medium of exchange, store of value, unit of account. -
Commodity money: intrinsic value / Fiat money : don’t have any intrinsic value the government decrease -
Fractional reserve banking system: the keep a fraction of deposit as reserves, the rest will loan out to public -
When bank loans => they creat money -
Money Supply( Cung tiền tệ) = currency + deposit -
In no banking system and 100% reserve banking system( hệ thống ngân hàng dự
trữ): money supply will not change -
Fractional reserve banking system ( hệ thống ngân hàng dự trữ phân đoạn): money
supply based on the loans public. -
Money multiplier = 1/R ( R : reserve ratio)
Three tools that CB (central bank) use to control MS ( money supply ):
1) Open market operations: buy and sell bonds.
When Fed Buy government bonds => Fed will pay money to the investors/ public =>
They have money and put into the bank => MS Will be increase because bank will have more loan out to public.
When Fed sell government bonds ( trái phiếu chính chủ) => Fed will take out of
money circulation (lưu hành tiền tệ) => Reduce MS 2) Reserve requirements
If Fed reduce RR => bank can make more loans => MS will increase
If Fed increase RR => MS will reduce.
3) Discount rate: the interest rate on loan that Fed let the bank borrow the money If Fed reduce DR, MS increase
If Fed increase DR, MS decrease