Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
18 Cards in this Set
- Front
- Back
|
A wind farm in Idaho buys a generator from a Swedish owned factory in Connecticut. What is the result? |
US GDP increases and Swedish GDP is unaffected |
|
|
Which is not included in the GDP? Government purchases Unpaid cleaning/housework Production of foreign citizens in the US
|
Unpaid cleaning/housework |
|
|
What is the definition of real and nominal GDP |
Nominal GDP values production at current prices while real GDP measures production at constant prices |
|
|
Per capita is not a perfect measure of GDP because |
it does not tell us anything about the distribution of wealth in society |
|
|
Bob bought a phone in 2013 costing $400 and Lou bought the same phone with more features for $400 the next year. What 3 things happen by means of CPI? |
The CPI would show no inflation and no change in cost for that portion of the market basket There's an increase in quality, so Lou is better off CPI did not capture a change in the basket |
|
|
Which is better in determining goods and services bought by consumers, GDP deflator or CPI? |
The CPI is better than GDP deflator in determining goods and services bought by consumers. |
|
|
What is the relationship between Inflation and interest rates? |
Nominal IR - Inflation = Real IR |
|
|
Al's company sells $1 mil worth of aluminum to a foil company who uses that aluminum to make and sell $4 mil of foil. How much of this transaction should be contributed to GDP? |
4 million |
|
|
Sam buys tea instead of soda because soda price has increased. What does this show by means of CPI? |
Substitution bias |
|
|
C=4,000 Ex=800 GDP=10,700 Im=200 I=600
What were the government purchases? |
5,500 |
|
|
What's the price index that measures goods and services bought by firms> |
Producer Price Index |
|
|
What is not a problem with GDP as a measure of national economic health? It measures unproductive activity It measures counterproductive activity Unsold inventory is a positive contribution to GDP It falsely categorizes unreported economic activity |
It falsely categorizes unreported economic activity |
|
|
Who is unemployed as defined by the BLS? |
Someone who lost his/her job and is actively looking for a new job |
|
|
A large # of people who used to work and seek work now do neither. This makes |
Both the number of people unemployed and the labor force fall |
|
|
Level of unemployment that would include frictional/structual unemployment consistent in a growing/changing economy is called the |
Natural rate of unemployment |
|
|
Which is not an explanation for the existence of unemployment in the long run
it takes time for workers to search for jobs they are suited for minimum wage laws act as binding price floors labor groups restrict the quantity of people who are qualified the business cycle |
the business cycle |
|
|
Frictional unemployment is sought to explain while structural is thought to explain... |
relatively short spells of unemployment, while structual unemployment explains long spells. |
|
|
The type of unemployment consistent with the idea of creative destruction is called |
structural unemployment but not frictional unemployment |
