Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
96 Cards in this Set
- Front
- Back
What is the CPI?
|
a measure of the overall cost of the goods and services bought by a consumer.
|
|
Race as Social Construction
|
- No Biological Aspect
-Race changes depending on where you are. |
|
Who reports the CPI?
|
The Bureau of Labor Statistics
|
|
Ethnicity
|
-Socially constructed
-Based on real/perceived common culture, history, and/or lineages -Self defined -Biggest ethnicity marker is language |
|
How often is the CPI reported?
|
Monthly
|
|
What is the CPI used to monitor?
|
changes in the cost of living over time
|
|
Social narratives Approach
|
-Uses qualitative data: approaches focusing on specific case studies
-Focuses on lived experuiences of racial/ethnic groups and how they View, Utilize, Experience, and Shape space in unique ways. |
|
Steps of calculating CPI?
|
1. Fix the Basket
2. Find the Prices 3. Compute Basket Cost 4. Choose a Base Year and Compute Index 5. Computer Inflation rate 6. |
|
What is "Fixing the Basket"?
|
determine what prices are most important
|
|
How does the BLS Fix the Basket?
|
1. Identifies market basket of goods that everyone buys
2. Conduct monthly consumer surverys |
|
Racial System Under Apartheid
|
-Started in 1948
-People were racialized into 4 categories >Black Africans >Asians >Whites >Coloureds -"The power to define is critical": since the whites controlled the government, they could create definitions of what is right or wrong |
|
How do we Find the Prices?
|
Find prices of each good/service in the basket for each point in time
|
|
Scales of Segregation under Apartheid
|
1. National Scale
2. Urban Scale 3. Interpersonal Scale 4. Petty Apartheid |
|
How do we Computer the Basket's Cost?
|
Use the data on prices to calculate cost of basket at different times.
|
|
(Scales of Segregation)
National Scale |
-Across entire country
-(Fake) Homelands given to Black Africans, outside the city |
|
How do we Compute the Index?
|
Divide price of basket in one year by the price in the base year, multiply by 100
|
|
(Scales of Segregation)
Urban Scale |
-Scale across the city
> Townships: segregated residential zones for non-whites ex Cape Flats outside Cape Town |
|
How do we calculator inflation rate?
|
((CPI year 2 - CPI year 1) / (CPI year 1) ) X 100
|
|
Petty Apartheid
|
People's everyday geographies were defined by their racial identities, sanctioned by the state
- The word petty makes it seem like not a big deal - Seen through segregated public facilities |
|
Calculate the Inflation Rate:
-Base year 2002 -Basket in 2002 is 1200 -Basket in 2004 is 1,236 |
(1236-1200)/1200
x 100 |
|
Knowing One's place apartheid
|
Two "places"
-Social -Physical |
|
Biggest basket?
|
Housing
|
|
Changing Geography of Immigration in the U.S.
|
Initially, immigrants were centered around urban Ethnic Enclaves, especially New York and LA
With time, these immigrants began moving outward to suburban areas |
|
Three biggest baskets?
|
Housing, Transportation, Food
|
|
Spacial Assimilation Model
|
-Immigrants traditionally clustered and formed distinct neighborhoods in urban areas called Ethnic Enclaves (Chinatown, Little Italy)
-*social capital* - Knowing people with common language -Post 1965: Immigrants more likely to cluster voluntarily |
|
3 problems with CPI?
|
-Subsitution bias
-Intro of new goods -Unmeasured quality changes |
|
Critiques of Spatial Assimilation
|
- Recent immigration faced different receiving societies than Europeans did in the US (politically, social, and demographcially)
-Recent immigrants exhibit distinct residential patterns |
|
What is Substitution Bias? (the problem with CPI)
|
The basket does not change to reflect consumer reaction to relative prices
|
|
Under Substitution Bias, 2 reason whythe basket doesnt change to reflect consumer reactions to prices?
|
-New Products result in variety, making each dollar more valluable
-Consumers need fewer dollars to maintain standard of living |
|
What are Unmeasured Quality Changes?
|
The BLS tries to adjust price for constant quality, but this is hard:
-If the quality of a good rises, the value of the dollar rices -vice versa |
|
The CPI overstates the true cost of living by __
|
Overstates it by 1% point per year
|
|
GDP deflator equation?
|
Nominal GDP / Real GDP times 100
|
|
What is the producer price index?
|
measures the cost of a basket of goods and services bought by FIRMS
|
|
Economists monitor what to gauge how quickly prices are rising?
|
GDP deflator and the CPI
|
|
Different between GDP deflator and CPI?
|
GDP deflator reflects prices of all goods produced domestically.CPI reflects all prices bought by consumers
and CPI compares price of a fixed basket, GDP deflator compares current produced goods prices |
|
The movement of the GDP deflator and CPI rate is...
|
generally the same
|
|
Indexing for inflation means ___
|
some dollar amount is automatically correct for inflation by law
|
|
Equation for indexing for inflation?
|
Amount in today's dollars =
(Amount in ___ )(price level today/price level in ___ ) |
|
What is the nominal interest rate?
|
The interest rate reported and not corrected for inflation
|
|
What interest rates do banks pay?
|
nominal interest rate
|
|
What is the real interest rate?
|
nominal interest rate correct for inflation
|
|
Calculate real interest rate
|
Nominal interest rate - Inflation
|
|
The Nominal Interest Rate and Real Interest Rate move ___
|
not always together
|
|
What is GDP?
|
Measure of income and expenditures of an economy.
|
|
Income must equal ____
|
expenditure
|
|
Why must income equal expenditure?
|
Every transaction has a buyer and a seller
|
|
What is NOT in the GDP?
|
1. Things made at home
2. Illegal stuff |
|
How do you calculate GDP?
|
Consumption + Investment + Government Purchases + Net Exports
|
|
What is Consumption?
|
Spending on goods by households
|
|
What is Investment?
|
Spending on capital stuff, including houses
|
|
What is Net Exports?
|
Exports minus imports
|
|
Which part of the GDP is the largest?
|
Consumption
|
|
What is Nominal GDP?
|
values production of goods at current prices
|
|
What is Real GDP?
|
values production of goods and services at constant prices
|
|
An accurate view of the economy requires adjusting which things?
|
Nominal AND Real GDP
|
|
Best measure of economic well-being of a society?
|
GDP
|
|
Higher per-capita GDP indicates what?
|
higher standard of living
|
|
A country's standard of living depends on what?
|
The ability to produce goods
|
|
How much does the US GDP grow annually?
|
2%
|
|
Standard of living is determined by what?
|
Productivity
|
|
How can one measure productivity and standard of living?
|
Real GDP per capita
|
|
What are the Factors of Production?
|
Physical capital
Human Capital Natural resources Technology |
|
What directly determine productivity?
|
Factors of production
|
|
What is Physical Capital?
|
Input in production
|
|
What is Human Capital?
|
Knowledge and skills acquired through training
|
|
What are Natural Resources?
|
Inputs used provided by nature
|
|
What is Technological Knowledge?
|
Society's understanding of efficient ways to produce things
|
|
As the stock of capital rises, extra ouput produced from an addition unit ___
|
falls
|
|
What is the effect referring to countries that start off poor tending to grow more rapidly than those starting rich
|
catch-up effect
|
|
Two kinds of Foreign Investment?
|
Direct
Portfolio |
|
What is Foreign Direct Investment?
|
Capital investment owned by foreign entity
|
|
What is Foreign Portfolio?
|
Investments financed with foreign money but operated domestically
|
|
How can population growth interact with factors of production?
|
1. Stretches natural resources
2. Diluting capital stock 3. Promoting tech progress |
|
What is the financial system made of?
|
financial institutions that coordinate actions of savers/borrowers
|
|
What are the two components of financial serve industries?
|
Financial markets
Financial intermediaries |
|
What are Financial markets?
|
institutions through which savers provide DIRECT funds
|
|
What are Financial Intermediaries?
|
instituions through which savers indirectly provide funds to borrowers
|
|
Examples of financial markets?
|
Stock
Bond |
|
Examples of Financial Intermediaires?
|
Banking firms
Mutual Funds Insurance Firms |
|
What is the sale of stock to raise money called?
|
equity financing
|
|
What is a securities firm?
|
a group selling stocks or bonds
|
|
What is a mutual fund firm?
|
sells shares to public then uses money to buy diversified portfolio
|
|
What is private saving?
|
among income households have after paying taxes
|
|
what is public saving?
|
amount revenue that goverment has after paying its spending
|
|
Tax incentives increases do what? (graph)
|
Shifts the demand curve to the right
|
|
What is crowding out?
|
increased borrowing and reduction in invesment
|
|
What will the effect of a deficit be?
|
interest rates rise
invesments fall |
|
What is Cyclical Unemployment?
|
year-to-year fluctuations in unemployment around natural rate
|
|
What 3 categories does the BLS put people into?
|
Employed
Unemployed Not in Labor Force |
|
If you are waiting for the start date of a new job, you are ___
|
unemployed
|
|
Who is in the Labor Force?
|
Employed AND the Unemployed.
|
|
How is the unemployment rate calculated?
|
Unemployed divided by Labor Force
Times 100 |
|
What is the Labor Force Participation Rate?
|
Labor Force divided by Adult Population
times 100 |
|
Most observed unemployment at a GIVE TIME is what kind of unemployment?
|
Long term
|
|
What is Frictional Unemployment?
|
unemployment from the time it takes to match workers with jobs
|
|
What is structual unemployment?
|
not enough spots for a job
|