Chapter 10: The Data of Macroeconomics

Question 1

microeconomics

Answer 1

the study of how individual households and firms make decisions and how they interact with one another in markets

Question 2

macroeconomics

Answer 2

the study of the economy as a whole

explain the economic changes that affect many households, firms, and markets simultaneously

Question 3

GDP

Answer 3

gross domestic product
the market value of all final goods and services produced within a country in a given period of time
measures the total income of a nation
For an economy a a whole, income must equal expenditure

Question 4

GDP Equation

Answer 4

Consumption + Investment + Government purchase + Net exports

Question 5

Consupmtion

Answer 5

spending by households on goods and services, with the exception of purchases of new housing

Question 6

Investment

Answer 6

spending on capital equipment, inventories, and structures, including household purchases of new housing

Question 7

Government purchases

Answer 7

spending on goods sand services by local, state, and federal governments

Question 8

Net exports

Answer 8

spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)

Question 9

nominal value

Answer 9

the value of goods and services using current prices

Question 10

real value

Answer 10

the value of goods and services at a constant price

Question 11

GDP deflator

Answer 11

a measure of the price level

Question 12

GDP deflator formula

Answer 12

(Nominal GDP * 100) / (Real GDP)

Question 13

Inflation rate in year 2

Answer 13

(GDP deflator in year 2 - GDP deflator in year 1)*100 / (GDP deflator in year 1)