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;
35 Cards in this Set
- Front
- Back
|
quantity supplied =
|
quantity demanded
|
|
|
quantity supplied depends on
|
price product sells at and price of materials
|
|
|
quantity demanded depends on
|
price level and income/output
|
|
|
real gdp=
|
nominal gdp/gdp deflator
|
|
|
Y=
|
consumption + investment + governmental purchases
*since net exports = 0 |
|
|
GNP=
|
GDP+ factor payments from abroad -factor payments to abroad
|
|
|
what does GNP measure?
|
gross net product residents of a nation
ex: Mexicans may send money home |
|
|
NNP=
|
GNP-depreciation which is the consumption of fixed capital
|
|
|
Personal income=
|
national income- (indirect business taxes, corp profits, social insurance contributions, net interest)+(dividends, govt transfers to individuals, personal interest income)
|
|
|
disposable income
|
personal income-tax/nontax payments
|
|
|
CPI
|
[P(2011)Q(2011)]/[P(2009)Q(2011)]
|
|
|
unemployment rate=
|
#unemployed/labor force X 100
|
|
|
how do we get the unemployment rate?
|
BLS
|
|
|
Y= income or output
|
F(K,L)
|
|
|
zY=F(zK,zL)
|
constant returns to scale
|
|
|
profit=
|
revenue-labor costs-capital costs
|
|
|
marginal product of labor=
|
wages/price
|
|
|
marginal product of capital=
|
rental price/price
|
|
|
economic profit=
|
Y-(MPL x L)-(MPK x K)=0 when at market clearing
|
|
|
accounting profit=
|
eco profit+(MPK x K)
because most firms own their capital |
|
|
Y=
|
C+I+G
|
|
|
C=
|
C(Y-T) = C(income-taxes)
|
|
|
I=
|
I(r)
|
|
|
in our equations G and T are fixed...
|
G and T are constant
|
|
|
Y=
|
C(fixed)+ I(r) + G(fixed)
|
|
|
Y-C-G=
S= |
I(r)
I(r) |
|
|
currency=
|
money
|
|
|
M1=
|
Currency + demand deposits + traveler's checks and checkable deposits
|
|
|
M2=
|
M1+retail money market mutual fund balances, savings deposits and small time deposits
|
|
|
explain the quantity theory of money
|
%M + %V= %P + %Y
since V and Y are fixed, change in the money supply directly affects the inflation rate (price level) |
|
|
V=
|
1/K
such that if K is large than velocity is slow and people hold money |
|
|
real interest rate=
|
nominal interest rate - inflation rate
|
|
|
Fischer equation: i=
|
real interest rate + expected inflation rate
|
|
|
expansionary fiscal policy
|
increase in government spending or decrease in govt. taxes
|
|
|
contractionary fiscal policy
|
decrease government spending or increase in taxes
|
