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18 Cards in this Set
- Front
- Back
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GDP Deflator
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Macro
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CPI
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Micro
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3 Main Macroeconomic Variables:
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1. Inflation
2. Unemployment 3. Productivity Growth |
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% increase in the price level
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inflation
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% decrease in the price level
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deflation
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inflation 50% in the price level
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hyper-inflation
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Hyper-inflation usually occurs in __________ _________
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developing countries
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the total market value of all currently produced final goods and services sold over a period of time within a country
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Gross Domestic Product
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transaction that is recorded and a specific value attached to the product
GDP excludes: 1. Illegal purchases 2. Household production |
market value
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Three Things Excluded by GDP:
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1. Used goods (Textbooks and Cars)
2. Transfer payments (Social Security and Stocks) 3. Any sale of land 4. Intermediate Goods (Bread bought for sandwich shop) |
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Which product contributes more to GDP, the products are final goods.
a) a pound of hamburger within the USA b) a pound of caviar within the USA |
B; You care about the total market value
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not adjusted for inflation (used in current prices)
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nominal GDP
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adjusted for inflation (constant prices/ base year prices/ chained year)
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real GDP
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Which gives you a better picture of the economy, real GDP or nominal GDP?
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Real GDP; because it adjusts for inflation and uses a base year price
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What do we use nominal GDP for?
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To find other variables
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Tells us the rise in nominal GDP that is attributable to a rise in prices rather than a rise in the quantities produced
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GDP Deflator
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(nominal GDP/real GDP) x 100
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GDP Deflator
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In the base year, GDP Deflator is always ___.
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100
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