GDP, Unemployment & Inflation Measurement
How the headline numbers are actually built: expenditure and income approaches, CPI, labor force stats.
Definition
The measurement layer of macro: GDP via expenditure (C+I+G+NX), income, or value-added routes; inflationinflationA sustained rise in the overall price level, eroding money's purchasing power. via CPI and the deflator; unemployment via labor-force surveys.
Key equation
GDP = C + I + G + (X − M); real GDP = nominal / deflator × 100
The intuition
The three GDP routes must agree because every sale is someone's income and someone's product. The gaps matter as much as the totals: what's excluded (home production, used goods, transfers) and how CPI overstates cost-of-living changes are classic sources of misreading.
Exam tip
Transfers and second-hand sales never enter GDP; inventories count as investment the year produced.
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