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10 Cards in this Set
- Front
- Back
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Def of standard of living
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access to goods and services that make peoples lives better
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Def of GDP
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market value of all final goods and services produced within a country in a given period of time
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Components for calculating by expenditure approach
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C + I + G + NX
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components for calculating by income approach
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WS + rent + interest + profits + Prop. I
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things not included in GDP
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transfer payements, intermediate goods, goods made outside of US
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Def. of transfer payments
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what government spends on SS benefits and welfare payment
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How to calculate real GDP
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Q1(04)xP1(04) + Q1(04)xP2(04)
Q1(07)xP1(04) + Q2(07)xP2(04) Hold prices constant w/ base yr |
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How to calculate nominal GDP
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Q1(04)xP1(04) + Q1(04)xP2(04)
Q1(07)xP1(07) + Q2(07)xP2(07) Current yr prices |
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How to calculate GDP deflator
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(Nominal GDP / real GDP) x 100
Find for both years |
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Why we would rather use real GDP
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Because we can find economy's actual output without a change in prices
it reflects only changes in amounts being produced |
