Principles of Macroeconomics / Unit 14 MAC 1304 short lesson, about 20 seconds
Measuring Against GDP
Captions available
The idea
Budget figures are compared across years and countries as shares of GDP, not as sums of money. A given deficit means something different in a large economy than in a small one, and prices change over time.
In practice
This is unit three's real-against-nominal problem, applied to budgets.
Where people slip
A record deficit in dollars may be modest as a share of output.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Something wrong in this lesson? Flag it · Sources for Principles of Macroeconomics