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Economic theory

The macroeconomy

Measuring a whole economy, and what moves output, prices and jobs.

Start: Nominal and real numbers

The 12 modules

Each module teaches one idea: a definition, how it works, and questions through the page. Take them in any order.

1Nominal and real numbersTell a nominal figure from a real oneConcept · 6 min · Free 2Converting a nominal figure to a real oneConvert a nominal figure into a real oneCalculation · 6 min 3What GDP measuresSay what GDP counts and what it leaves outConcept · 7 min 4The circular flow of incomeFollow a pound round the circular flow and name each leakHow it works · 7 min 5Measuring inflation with a price indexBuild a price index and work out an inflation rate from itCalculation · 6 min 6Demand-pull and cost-push inflationTell demand-pull inflation from cost-pushTell them apart · 6 min 7Measuring unemploymentSay who counts as unemployed and who does notConcept · 7 min 8Types of unemploymentSort a case of unemployment into its typeTell them apart · 7 min 9Aggregate demandSay what aggregate demand is and name its four partsConcept · 7 min 10Short-run and long-run aggregate supplyTell short-run aggregate supply from long-runTell them apart · 6 min 11The multiplierWork out a multiplier and apply it to an injectionCalculation · 7 min 12What economic growth is, and what it is notTell growth from a recovery, and real growth from nominalConcept · 6 min