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10 Cards in this Set
- Front
- Back
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Unemployment rate = |
(number of unemployed) / labor force
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Labor force participation rate = |
Labor force / working age population |
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Three types of unemployment |
1. Frictional 2. Structural 3. Cyclical |
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Natural rate of unemployment |
Rate of unemployment at potential GDP; frictional plus structural unemployment but not cyclical |
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Consumer Price Index (CPI) |
A measure of the average change over time in the price a typical urban family of four pays for goods and services. |
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The CPU in 1995 was 131 and the CPI in 2014 was 218. If you earned a salary of 40,000 in 1995, what would be a salary of equivalent purchasing power in 2014? |
(40,000/x) = (131/218) X= 2014 salary |
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Real wage = |
(Nominal wage/ price level) x 100 |
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If real GDP is 7400 in 2014, what will it be in 2017 if GDP grows at an annual rate of 2.8% |
7400 ( 1+ .028) ^5 = 8595.66 |
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If real GDP double between 2005 and 2020, what is the average annual growth rate of real GDP per capita? |
20,000 = 10,000 ( 1 + x ) ^ 15 |
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If real inflation is higher than expected inflation, then who is worse off? The borrower or the lender? |
Borrower |
