Reading...
Play button
Play button
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;
21 Cards in this Set
- Front
- Back
|
GDP
|
total market value of good and service
|
|
|
GDP (Expenditure Approach)
|
Summing the amounts spent on goods and services produced during the period
|
|
|
GDP (Income Approach)
|
Summing the amounts earned by households and companies during the period
|
|
|
GDP Deflator
|
Price index to convert nominal GDP into real GDP p.122 Exercise 2
|
|
|
GDP Equation (expenditure approach)
|
C+I+G+(X-M)
|
|
|
GDP Equation (Income Approach)
|
National income + Capital consumption allowance + Statistical discrepancy
|
|
|
personal disposable income
|
personal income - personal taxes
|
|
|
Marginal Propensity to Consume
|
The proportion of additional income spent on consumption
|
|
|
IS Curve
|
Inverse relationship between real interest rate and income
S-I = (G-T) + (X-M) |
|
|
Aggregate demand curve
|
relationship between quantity of real output (GDP, real income) and the price level
|
|
|
Aggregate supply curve
|
Amount of output firms will produce at different price levels
|
|
|
LRAS
|
wages and other input prices change proportionally to the price level, perfectly inelastic
|
|
|
SRAS
|
input prices are sticky, when output prices increase, the price level increases
|
|
|
Increase in consumer's wealth
Business expectation (tend to increase investment) Consumer expectations of future income (Consumption) High capacity utilization (Working at full cap, I increase) Expansionary monetary policy Expansionary fiscal policy Exchange rate global economic growth (Improve export) |
Factors that Shift AD to right
|
|
|
Labor productivity
Input prices Expectations of future output prices Taxes and government subsidies exchange rates |
Factors that Shift SRAS to right
|
|
|
Increase in supply and labor quality
Increase in supply of natural resources Increase physical capital Technology |
Factors that Shifts LRAS
|
|
|
Recessionary Gap
|
Excess supply
Downward pressure on price |
|
|
Inflationary gap
|
Excess demand for real goods and services
|
|
|
Stagflation
|
High unemployment and increasing inflation
|
|
|
Labor force
|
age of 16 who are either working or available for work but currently unemployed
|
|
|
Production function
|
Y = A x f(L,K)
|
