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28 Cards in this Set

  • Front
  • Back
What is Gross Domestic Product?
GDP, Is the total value of all new goods and services producaed in a country.
What are the ways you can measure GDP?
1)The Expenditure Approach 2)Income Apporach
What does the Expenditure approach include?
Consumer spending, business investments, government spending and net exports
What does the Income Approach Include?
Wages, interest earnings, profits, and rent
What does GDP not include?
-value of used product -volunteer work -purley financial transactions -value of intermediary goods -unreported economic activity -illegal economic activity
What is nominal GDP?
GDP expressed in the dollar value of a givin year(aka current GDP)
What is Real GDP?
GDP for one year expressed in the dollar of another base year (aka constant GDP) *removes inflation
Define Inflation.
Ageneral rise of prices accross an entire economy.
What is Price Index?
A number that tells us how much prices have changed since a basse year (%)
What are Market Basket goods?
They are used to construct a price index and is a sampling of commonly purchased goods.
What are the 3 typesof price indexes?
1)Implicit price deflator 2)Consumer price index 3)Producer price Index
What is an Implicit price deflator?
The broadest measure of price changes.
What is the Comsumer Price Index?
Measures inflation for consumer products.
What is the Producer Price Index?
Measures inflation in resource prices.
What is the equation to calculate the past price to current price?
the salary in nominal $ * (CPI un recent year/CPI in old year)
What is Per Capita GDP?
Used to compare different national economies on a per person basis.
How do you calculater per capita GDP?
What are the 4 types of Unemployment?
1)Frictional Unemployment 2)Structral Unemployment 3)Cyclical Unemployment 4)Seasonal Unemployment
What is Frictional unemployment caused by?
People choosing to quit thir jobs or people waiting to start new jobs
What is Structral Unemployment caused by?
cahnges in economy that result in peoples skills becoming obsolete
What is cyclical unemployment caused by?
Flutuations in the business cycle.
What is Seasonal unemployment caused by?
Changes in the season.
What are the phases of the business cycle?
Expansions, Peaks, Contractions, Troughs
What is the natural rate of unemployment?
the lowest possible unemployment rate or full employment (3-4%)
What are economic indicators?
specidific economicactivites that have goos intication of the general activity within the economy. (leading, coincident, lagging)
What is Aggregate Demand?
A schedule graphically represented as a curve which shows the various amounts of goods and services-the amounts real domestic output-chich domestic consumers, businessses, govt and foreign buyers collectively will desire to purchase at each possible price level.
What are factors that shift aggregate demand?
changes in consumer spending and changes in investment business spending
What is aggregate supply?
A schedule graphically represented as a curve which shows the level of real domestic output (GDP) avaliable at each posssible price level.