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10 Cards in this Set
- Front
- Back
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Macroeconomics
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The study of the economy as a whole
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Real GDP
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measures the total income of everyone in the economy (adjusted for the level of prices).
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The Inflation Rate
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measures how fast prices are rising
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The Unemployment Rate
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measures the fraction of the labor force that is out of work
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Recessions
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periods during which real GDP falls mildly
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Depressions
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periods during which real GDP falls severely
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Deflation
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Periods of falling prices
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models
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something economists use to understand the world
Models are useful because they help us to dispense with irrelevant details and to focus on underlying connections The Purpose of a model is to show how the exogenous variables explain the endogenous variables. |
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Endogenous variables
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those variables that a model tries to explain
The Purpose of a model is to show how the exogenous variables explain the endogenous variables. |
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Exogenous variables
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those variables that a model takes as given
The Purpose of a model is to show how the exogenous variables explain the endogenous variables. |
