Chapter 5 Flashcards
In factor markets
Households supply labor to firms.
Households provide capital to firms (land, buildings, equipment) to produce output
In factor markets
Households supply labor to firms.
Households provide capital to firms (land, buildings, equipment) to produce output
Production markets
Firms sell goods and services to customers
Production markets
Firms sell goods and services to customers
Output & Input markets
Firms supply products on the output market, yet demand inputs on the factor market. And consumers demand products on the output market, and supply the input of labor on the factor market.
Output & Input markets
Firms supply products on the output market, yet demand inputs on the factor market. And consumers demand products on the output market, and supply the input of labor on the factor market.
Nominal GDP
the market value of FINAL goods and services produced per time period; can increase because prices go up and/or output goes up.
Nominal GDP
the market value of FINAL goods and services produced per time period; can increase because prices go up and/or output goes up.
Real GDP
Real GDP is nominal GDP after holding price changes constant, and can only increase if output goes up
Real GDP
Real GDP is nominal GDP after holding price changes constant, and can only increase if output goes up
GDP is sum of
consumption, investment, government spending, and net exports.
GDP is sum of
consumption, investment, government spending, and net exports.
Trade Surplus
excess of exports over imports, and vice versa for a trade deficit.
Trade Surplus
excess of exports over imports, and vice versa for a trade deficit.
Whichofthefollowingwouldnotbeconsideredamacroeconomicquestion? a. Why do some economies grow faster than do others? b. What are the factors that determine unemployment? c. What factors determine the price of computers?
d. How does the exchange rate affect international trade? e. What are the effects of inflation on the economy?
c. What factors determine the price of computers?
Whichofthefollowingwouldnotbeconsideredamacroeconomicquestion? a. Why do some economies grow faster than do others? b. What are the factors that determine unemployment? c. What factors determine the price of computers?
d. How does the exchange rate affect international trade? e. What are the effects of inflation on the economy?
c. What factors determine the price of computers?
Macroeconomics involves the study of economics from the standpoint of:
e. the aggregate economy.
Macroeconomics involves the study of economics from the standpoint of:
e. the aggregate economy.
Infactormarkets: a. households demand resources which firms supply. b. households supply inputs which firms demand. c. households supply goods and services which businesses demand. d. firms supply products which households demand. e. households demand inputs which firms supply.
b. households supply inputs which firms demand.
Infactormarkets: a. households demand resources which firms supply. b. households supply inputs which firms demand. c. households supply goods and services which businesses demand. d. firms supply products which households demand. e. households demand inputs which firms supply.
b. households supply inputs which firms demand.
A nation’s gross domestic product:
reflects the total market value of all final goods and services
produced within an economy in a given year.
A nation’s gross domestic product:
reflects the total market value of all final goods and services
produced within an economy in a given year.
Wemeasuregrossdomesticproductbymultiplyingthequantitiesofgoods by their prices because it allows us to
express the values of products in a common unit of measurement.
Wemeasuregrossdomesticproductbymultiplyingthequantitiesofgoods by their prices because it allows us to
express the values of products in a common unit of measurement.
How does real gross domestic product(GDP) differ from nominal GDP?
Real GDP controls for price changes, while nominal GDP does not.
How does real gross domestic product(GDP) differ from nominal GDP?
Real GDP controls for price changes, while nominal GDP does not.
For the purpose of GDP accounting, consumption expenditures include:
durable goods, non-durable goods, and services.
For the purpose of GDP accounting, consumption expenditures include:
durable goods, non-durable goods, and services.
When a country runs a trade deficit it must:
must sell assets to individuals or governments in foreign countries.
When a country runs a trade deficit it must:
must sell assets to individuals or governments in foreign countries.
GDP understates the value of output produced by an economy because ite
excludes transactions that do not take place in organized markets,
such as home-cooked meals.
GDP understates the value of output produced by an economy because ite
excludes transactions that do not take place in organized markets,
such as home-cooked meals.
