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19 Cards in this Set

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Pr =
PI + D + CIT + UCP
What is included in income approach?
w (wages)
r (rent)
i (interest)
Pr (profits)
IBT (indirect business taxes)
NFFI (GDP-GNP)
KCA (capital consumption allowance OR depreciation)
price index =
prices in a given year
----------------------
prices in a base year
% change in price =
new price - old price
--------------------- X 100
old price
annual rate of inflation (ARI) =
% change in price
-----------------
number of years (n)
RGDP =
NGDP(nominal GDP)
----
PI (price index)
~df (in decimal form)
Describe nominal GDP.
Nominal GDP is unadjusted for inflation; it describes current dollar value.
How can undemployment be determined?
# of people unemployed
---------------------- X 100
# of people in labor force
Who is in the labor force?
1. People age 16 and older
2. Not in armed forces
3. Actively seeking employment
Structual Unemployment
Change in technology; workers cannot compete
Frictional Unemployment
Qualified worker between jobs; time lags
Cyclical Unemployment
Unemployment resulting from downswing of business cycle.
Name the 4 phases of a business cycle:
1. Expansion
2. Peak
3. Recession
4. Trough
What is the natural rate of unemployment?
minimal structual
minimal frictional
zero cyclical
Full employment
natural rate of unemployment; not zero unemployment
aggregate demand
all indvidual demand curves added together to include an overview of total economy
What causes a shift in aggregate demand?
Change in:
C (personal consumption expen)
I (gross private domestic inv)
G (government expen)
NX (exports - imports)
Ms (money supply)
e (exchange rate)
T (taxes)
tastes and preferences
income
# of consumers
price of compliment/substitute
expected income or prices
What causes a shift in aggregate supply?
Change in:
technology
cost of resources
# of producers
shocks (+ or -)
Does depreciation in U.S. money (exchange rate)increase or decrease our exports?
It will increase our exports, because it foreign countries can now buy more of our products at a lower price.