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22 Cards in this Set

  • Front
  • Back
what is GDP?
- the market value of the final goods and services produced during a given period
- add up the selling price of everything
what is included in GDP?
- only goods and services produced within the borders of a country.
- even foreign companies that produce in the US
GDP Calculation - Value-Added Method
- add up the selling price of an intermediary firm's product and subtract the costs of inputs purchased from other firms
GDP Calculation - Expenditure Method
consumption expenditure + investments + government purchases + net exports
what is consumption expenditure?
spending by households on durable goods (cars and furniture), nondurable goods (food and clothing), and services (legal, financial, and educational)
what are investments?
spending by firms on capital goods (machinery, factories, offices), residential investments (construction of NEW homes and apartment buildings), and inventory purchases
what are government purchases?
final goods by governments
only includes payment in exchange for goods; transfer payments are NOT included
what are net exports?
exports minus imports
what are some factors excluded from real GDP?
leisure time, environmental quality, volunteering
what is the criteria for an employed person?
1.) 16 years or older
2.) worked full time or part time during the preceding week
what is the criteria for an unemployed person?
1.) 16 years or older
2.) did not work in the week preceding, but did try to find work in the past 4 weeks
what is the criteria for a person out of the workforce?
they must be retired, under the age of 16, or not looking for work
unemployment spell
a period in which someone has been continuously unemployed
the length of time that someone has been under an unemployment spell aka the amount of time that someone has been unemployed
what is the labor force?
the total # of employed and unemployed people
what is the unemployment rate?
# of unemployed/labor force
what is the participation rate?
labor force/working age population
what are some criticisms of the accuracy of the unemployment rate?
1.) discouraged workers should be included as unemployed rather than out of the labor force
2.) involuntary part-time workers should not be included as employed, but as partially unemployed
what are discouraged workers?
they would like a job, but have not made an effort to find one in the past 4 weeks
what are involuntary workers?
they are classified as being employed, but they are only working part time when they would like to work full time
what are the short-term unemployed?
people who are only temporarily out of a job, but find one soon
what are the chronically unemployed?
workers who are in an out of a job; short, but frequent unemployment spells