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11 Cards in this Set
- Front
- Back
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What is economics?
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the study of production of goods and services, their distribution in the society, and the allocation of resources.
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What is macroeconomics?
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The branch of economics that analyzes the behavior of the economy as a whole, focusing on large economic aggregates such as GDP, total employment, overall price level, and how these aggregates are determined.
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What are the main goals of macroeconomics?
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1. economic growth: measured by GDP, creates employment, income and increased output of goods.
2. full employment 3. price stability: happens when there is relatively little movement in the price level. |
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What is the relationship between macroeconomics and the Great Depression?
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After the Depression, people began question the idea of markets controlling themselves and decided that markets needed more government regulation. Began following 3 goals of macro
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How to measure economic growth? todays economy?
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gdp=C+I+G+(x-m) about 15.6 trillion
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What is the difference between real and nominal measurments, such as GDP and wages? Why is this important?
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Real is the inflation-adjusted measure expressed with a base year, use for comparing 2 years.
Nominal is not adjusted and is used to determine total value in a particular year. |
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How do you calculate unemployment in the macroeconomy?
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labor force x unemplyment rate
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What is the difference between a recession and a depression?
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A recession is a slowing down of economic activity, resulting in an increase in unemployment and excess industrial capacity.
A depression is a prolonged recession, where you have mass unemployment, a level of national income well below the potential level, and great excess capacity. |
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What are three problems with the measurement of the GDP
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-illegal activity under the table that is not being counted
-change in quality of items -pollution and other economoy "bads" -price changes make it hard to get correct amongst years -income distrubution |
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What are the general characteristics of Money
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medium of exchange, store of value, unit of account
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What makes up the demand for Money
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transaction, precautionary and speculative
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