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28 Cards in this Set
- Front
- Back
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real GDP is constant
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this implies the rate of change effect is neutral, and this will neither increase nor decrease the inflation rate
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unemployment rate is constant
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this implies the rate of change effect is neutral, and this will neither increase nor decrease the inflation rate
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real GDP is rising quickly
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this implies there is a rate of change effect and this will increase the inflation rate in the future (compared to inflation this year)
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unemployment rate is falling quickly
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this implies there is a rate of change effect and this will increase the inflation rate in the future (compared to inflation this year)
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real GDP is falling (there is a recession)
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this implies that there is a rate of change effect and this will decrease the inflation rate in the future (compared to inflation this year).
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unemployment rate is rising
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this implies that there is a rate of change effect and this will decrease the inflation rate in the future (compared to inflation this year).
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real GDP equals the natural, potential, or full employment level
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this implies the level effect in neutral, and this will neither increase nor decrease the inflation rate
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unemployment rate equals the natural rate of unemployment.
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this implies the level effect in neutral, and this will neither increase nor decrease the inflation rate
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real GDP is greater than its natural, potential or full employment level
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this implies there is a level effect and this will increase the inflation rate in the future
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unemployment rate is less than the natural rate of unemployment
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this implies there is a level effect and this will increase the inflation rate in the future
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real GDP is less than its natural, potential or full employment level
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this implies there is a level effect and this will decrease the inflation rate in the future
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actual unemployment rate is greater than the natural rate of unemployment
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this implies there is a level effect and this will decrease the inflation rate in the future
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economics as a topic seperate from philosophy began in 1776 with the ideas in
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the wealth of nations by adam smith
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macro economics is how old?
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75 years
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under western feudalism
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-nobles vould not order peasants off their lands or out of their cottages
-peasants kept the major portion of their harvests -the noble would store grain to support peasants through the winter |
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calculate unemployment rate
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#unemployed/(#employed+#unemployed
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# of families of US
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100 million
100,000,000 |
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Define GDP
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the value of all final goods and services produced in a specific area over a specific time. usually a country in a year
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frictional unemployment
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the time it takes to match job seekers with employers who have job vacancies
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cyclical unemplyment
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a general decline in sales and employment
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when the inflation rate is expected to vary in an unpredictable manner, this will
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-make potential borrowers reluctant to take out loans
-make potential lenders reluctant to make loans. |
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a recession occurs
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if RGDP falls for 6 months (2 quarters).
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Explain Real GDP
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total value of all goods and services produced, adjusted for inflation.
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GDP=
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C+I+G+NX(EX-IM)
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trade deficit
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imports - exports
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National Savings (NS)=
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Investment+NX
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As a multiplicative factor, how much higher are prices today than in 1980?
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CPI/CPI't-1'=1.5 times higher
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translate min. wage in 1980 into todays prices
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Min Wage't-1' x change in prices
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