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19 Cards in this Set
- Front
- Back
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Pr =
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PI + D + CIT + UCP
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What is included in income approach?
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w (wages)
r (rent) i (interest) Pr (profits) IBT (indirect business taxes) NFFI (GDP-GNP) KCA (capital consumption allowance OR depreciation) |
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price index =
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prices in a given year
---------------------- prices in a base year |
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% change in price =
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new price - old price
--------------------- X 100 old price |
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annual rate of inflation (ARI) =
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% change in price
----------------- number of years (n) |
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RGDP =
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NGDP(nominal GDP)
---- PI (price index) ~df (in decimal form) |
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Describe nominal GDP.
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Nominal GDP is unadjusted for inflation; it describes current dollar value.
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How can undemployment be determined?
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# of people unemployed
---------------------- X 100 # of people in labor force |
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Who is in the labor force?
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1. People age 16 and older
2. Not in armed forces 3. Actively seeking employment |
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Structual Unemployment
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Change in technology; workers cannot compete
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Frictional Unemployment
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Qualified worker between jobs; time lags
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Cyclical Unemployment
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Unemployment resulting from downswing of business cycle.
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Name the 4 phases of a business cycle:
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1. Expansion
2. Peak 3. Recession 4. Trough |
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What is the natural rate of unemployment?
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minimal structual
minimal frictional zero cyclical |
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Full employment
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natural rate of unemployment; not zero unemployment
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aggregate demand
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all indvidual demand curves added together to include an overview of total economy
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What causes a shift in aggregate demand?
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Change in:
C (personal consumption expen) I (gross private domestic inv) G (government expen) NX (exports - imports) Ms (money supply) e (exchange rate) T (taxes) tastes and preferences income # of consumers price of compliment/substitute expected income or prices |
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What causes a shift in aggregate supply?
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Change in:
technology cost of resources # of producers shocks (+ or -) |
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Does depreciation in U.S. money (exchange rate)increase or decrease our exports?
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It will increase our exports, because it foreign countries can now buy more of our products at a lower price.
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