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