Macroeconomics

Front 1

What did the crisis in 2008 cause?

Back 1

1. output growth rate to decrease
2. Unemployment to rise
3. Inflate Rate to increase

Front 2

The US

federal budget surplus or deficit?

Back 2

Deficit

Front 3

The Euro Area
High or low unemployment rate?

Back 3

High

Front 4

The Euro Area

What was the high unemployment rate caused by? Why is reducing labour market rigidities not an option?

Back 4

Tight macroeconomic policy (high cost for firms to fire and hire employees)

Front 5

The Euro Area
Why is the euro not perfect for the european countries?

Back 5

--> lose control over monetary policy
--> difficult to change the exchange rate
--> slow recovery from recessions because unable to change interest rates quickly

Front 6

China

What has rapid growth caused in China?

Back 6

1. high output rate
2. low employment rate
3. moderate inflation

Front 7

China
Why did China not suffer much during recession?

Back 7

Increased investment caused more output

Front 8

China
What was the growth caused from?

Back 8

- technological progress
- high investment rate

Front 9

GDP
Method one

Back 9

Value of the final goods and services
(Revenue (of final firm) - Expenses (of final firm)= Profits)

Front 10

GDP
Method Two

Back 10

Sum of Value Added
(What did each company add to system)

Front 11

GDP
Method Three

Back 11

Sum of Incomes
(All Wages + Profits (Revenue - Expenses))

Front 12

Nominal Income ($Y) Defined

Back 12

the sum of the quantities of final goods produced at their current price

Front 13

Real GDP (Y) defined

Back 13

the sum of quantities of final goods times constant price (base year)

Front 14

Growth Rate defined

Back 14

Yt - Yt-1 / Yt-

Front 15

The labour force

Back 15

L (labour force) = N (employment) + U (unemployment)

Front 16

The unemployment rate

Back 16

u= U (unemployment) / L (labour force)<-- people looking for work or who have work

Front 17

Participation Rate

Back 17

L (people looking for work or who have work)/ population of working age (full working population working, not working, given up looking, do not want to work)

Front 18

The GDP Deflator

Back 18

Pt= Nominal GDP/ Real GDP ($Yt/Yt)

Front 19

Nominal GDP can be calculated by (using Pt, Yt, inflation rate, growth rate)

Back 19

PtYt or inflation rate + growth rate

Front 20

Okun's Law

Back 20

that if output growth is high then unemployment will decrease (1% in output will cause 0.4% decrease in unemployment)

Front 21

The Phillips Curve

Back 21

the realtionship between inflation and unemployment ( inflation on vertical, unemployment on horizontal, downward sloping)

Front 22

The Short Run Changes because of

Back 22

change in demand

Front 23

The Medium Run changes because of

Back 23

change in supply

Front 24

The Long Run changes because of

Back 24

government actions

Front 25

GDP calculated by

Back 25

GDP = C + I + G +NX

Front 26

GNP calculated by

Back 26

GNP= GDP + net factor income from abroad

Front 27

Trade Balance

Back 27

Exports - Imports

Front 28

Indirect Taxes

Back 28

taxes from purchases of goods and services

Front 29

Direct Taxes

Back 29

taxes from income

Front 30

Government Primary Deficit

Back 30

government expenditure + transfer payments - direct taxes - indirect taxes