Macro Economics 18Th Edition Chptr 6

Front 1

1.What is the difference between Real GDP and Nominal GDP?

Back 1

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Real- measures the value of final goods and services produced within the borders of a given country during a given period of time, typically a year. (adjusted for inflation) (Nominal minus inflation)

Nominal- totals the dollar value of all goods and services produced within the borders of a given country using their prices during the year that they were produced. (todays dollars)

Front 2

2.Identify some of the economic consequences of unemployment?

Back 2

-must count as a loss all the goods and services that unemployed workers could have produced if they had been working.
-major social problems like higher crime rate and greater political unrest as well as higher rates of depression, heart disease, and other illnesses amoung unemployed.

Front 3

3.What is “inflation”? How can it affect the economy?

Back 3

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-is an increase in the overall level of prices.

Front 4

4.What do economists mean when they use the term “modern economic growth”?

Back 4

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output begins to grow faster than the population and living standards began to rise as the amount of out put per person increased.
- output per person rises as compared with earlier times in which output (but not output per person) increases.

Front 5

5.What does “GDP per Capita” measure? How is it computed?

Back 5

GPD divided by per person

Front 6

6.What is the difference between “savings” and “investments”?

Back 6

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savings- are generated when current consumption is less than current output(or when current spending is less than current income)
investment-happens when resources are devoted to increasing future output. ( they are going to improve the economy, equipment, plants)

Front 7

7.How do “financial investment” and “economic investment” differ?

Back 7

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financial investment-stocks and bonds, are only paper,

economic investment- creation and expansion of business enterprise. (capital goods)

Front 8

8.What is the principal source of savings? Of economic investors?

Back 8

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Households

businesses

Front 9

9.What is an “economic shock”?

Back 9

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-situations in which they were expecting one thing to happen but then something else happened.
(something worse happened than what you expected)

Front 10

10.How do demand shocks and supply shocks differ?

Back 10

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demand- are unexpected changes in the demand for goods and services. (consumers have suddenly changed their minds about.)
supply-are unexpected changes in the supply of goods and services

Front 11

11.What is the economic definition of “inventory”?

Back 11

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-is a store of output that has been produced but not yet sold.

Front 12

12.What is the difference between “flexible prices” and “sticky prices”?

Back 12

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flexible- direct coorolation to demand

prices are inflexible. price go up fast and come down slow.

Front 13

13.(The Last Word) Identify the main points of this article. Which ones do you agree or disagree with?

Back 13

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