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12 Cards in this Set
- Front
- Back
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If you move Net Private Investment to Consumer goods what happens to the GDP as a result?
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Decreasing capital (K) and increases consumption but it has no effect on GDP.
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How do you calculate unemployment rate?
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Amount unemployed / labor force x 100 = Unemployment rate.
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Nominal GDP =
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Price x Quantity.
It's the GDP measured in terms of the price level at the time of measurement and unadjusted for inflation. |
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Why are stocks and bonds (or financial transactions) not included within GDP?
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There are just the transfer of payments and has absolutely nothing to do with production.
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What is a COLA?
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Cost of Living Adjustment.
An automatic increase in wages (income) of workers when inflation occurs. |
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What is a COLA guaranteed by?
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A collective bargaining contract between firms and workers.
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How do you calculate CPI?
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Current year/base year x 100
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How do you calculate inflation?
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Year 2 CPI - Year 1 CPI / Year 1 CPI x 100
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Why is unemployment not always completely reliable?
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It doesn't include discouraged workers who are not seeking work. If you're not actively searching for a job position you are not considered unemployed even if you are lacking a job and just aren't looking for a new one.
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Is structural unemployment better in the long run or short run?
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Structural unemployment is bad in the short run and good in the long run.
(Typewriter repairman) |
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What is considered a leakage in the circular flow model?
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Saving and investment.
Saving money for personal uses (in prospect of medical emergency, other accidents, etc.) leaves the circular flow model between businesses and firms. |
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How should you determine if something is included/not included in the GDP?
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Does it affect production of a good or service?
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