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27 Cards in this Set
- Front
- Back
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Real GDP |
Focuses on base year prices. Total value of all final goods & services produced in the economy during a given year using base year prices |
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Nominal GDP |
The total values of all G&S produced in the economy during a given year using current year prices |
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Actual Growth in aggregate output |
real GDPyr2 -Real GDPyr1/ real GDP yr1 |
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Real per capita GDP |
size of population |
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employment |
The number of people currently employed in the economy full/part-time |
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Underemployment |
Working part time but really wants a full time job |
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Discouraged worker |
nonworking people who are capable of working but have given up looking for a job |
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Marginally attached |
Would like to be employed and have applied for jobs, but are not currently looking |
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Real GDP and the changes to unemployment rate |
increase in minimum wage and overall goods and services |
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reasons that lead to job loss
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Structural changes, outsources, replaced by technology, poor performance, increase in minimum wage |
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Minimum wage |
wage floor above equilibrium |
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The natural rate of unemployment |
the actual unemployment rate fluctuates |
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Shoe- leather costs |
the cost associated with spending money before the price level rises |
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Unit of account costs |
a rise from the way inflation makes money a less reliable unit of measurement as price increases. PP decreases |
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Nominal interest rates |
current interest rate today |
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real interest rates |
adjusted for inflation |
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Aggregated price level |
a single number that represents the overall level of prices |
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Price index |
measures the cost of purchasing a given market basket in a given year |
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consumer price index |
prices of all goods and services excluding food and gas |
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producer price index |
measures changes in the prices of goods purchased by producers |
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marginal Propensity to consume |
The overall increase in consumer spending when disposable income rises by $1 |
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Marginal Propensity to save |
the overall increase consumer saving when disposable income rises by $1 |
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the multiplayer |
The increase of spending create a direct effect and generates multiple rounds of spending |
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AD curve has a negative slope |
Wealth effect- C:up, AO: up= APL: down The interest rate effect- i: down, I:up |
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Causes Aggregate demand to decrease |
if consumers and business have pessimistic expectations regarding the future, if household wealth falls, if firms reduce investment spending |
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why the short-run aggregate supply curve is positive slope |
nominal wages, |
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uses the short-run aggregate supply to increase |
commodity prices fall, nominal wages were to fall,productivity rises, any other factors decrease the first cost of production. |
