Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Econ 102 > Chapter 6 > Flashcards

Chapter 6 Flashcards

1
Q

Macroeconomics involves..

A

adding up the economic activity of all households and businesses to obtain the overall demand and supply in the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The goals of Macroeconomics is to

A

assess overall economic performance that includes inflation, unemployment rate, growth and production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Economic growth determines the…

A

Standard of Living in a country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Inflation is measured by the..

A

consumer price index

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

low inflation and an inflation rate of ____ is the goal

A

1-2%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

A growth rate more than ___ is considered good

A

3%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

The Framework for Macroeconomics include?

A

Macroeconomic Models,Theories of Aggregate demand and Aggregate Supply, Charts and Case Studies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The general policies for Macroeconomics include? describe them.

A

Fiscal Policy(involves changed in gov’t spending/purchases and taxes) and Monetary Policy(involves managing the money supply and interest rates)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Growth is measured by

A

the change in real GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

An unemployment rate of __% or less is considered good

A

5

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

GDP (Gross Domestic Product) is the

A

value of the production of all goods and services produced in a country within a year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

GDP can be measure by?

A
  1. the total amount of money that consumers, the gov’t and investors purchased within the economy minus the value of imported goods
  2. The total amount of money of the final goods and services a country produces
  3. market prices
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

GDP is equal to the

A

total expenditure(total income)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

GDP involves who?

A

both the buyer and seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Gross National Product(GNP) is

A

what is produced domestically and what is produced by domestic labor and business nationally in a year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

GNP includes?

A

GDP plus Canadian income earned abroad

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Net National Product (NNP) is

A

GDP minus the value of depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Depreciation is

A

the process of which the capital(money) ages and loses value overtime

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Nominal Value is

A

the economic value of inflation before it has been adjusted, uses the current prices for products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Real Value is

A

the economic value of inflation after it has been adjusted, uses past prices for products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The GDP Deflator is the

A

measures the price of all goods and services included in GDP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The opposite of Deflation is?

A

Inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Demand for production can be divided into 4 main parts, describe each:

A

Consumer Spending(consumption), Business Spending(purchasing new capital goods, building factories, buildings, stores and equipment, construction) Government Spending on Goods and Services(bridges and highways), and Spending on Net Exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What makes up half of the demand side components of the GDP?

A

Consumption

25
Q

GDP can be measured by the following calculation..

A

GDP=Consumption+ Investment+ Government spending+ (Trade Balance)

26
Q

The gap between exports and imports is known as the…

A

Trade Balance

27
Q

When a country’s exports are larger than its imports it is called a….

A

Trade Surplus

28
Q

When a country’s imports exceed its exports it is called a….

A

Trade Deficit

29
Q

We measure real GDP by the following calculation:

A

Real GDP=Nominal Value/GDP DeflatorX100

30
Q

One year in economics is known as a

A

base period

31
Q

We can calculate real GDP Growth rate by the following calculation:

A

Real GDP of 2nd year- Real GDP of 1st year/ Real GDP of 1st yearX100

32
Q

A Recession is a

A

decline in GDP

33
Q

A Depression is a

A

long and deep decline in output

34
Q

A Depression happens when

A

a recession deepens and lasts longer, during economic slowdown

35
Q

The Business Cycle is

A

the economies short term movement in and out of recessions

36
Q

The highest point of the output is known as the

A

Peak

37
Q

The lowest point of the output is known as the

A

Trough

38
Q

A recession lasts from…

A

Peak to Trough

39
Q

An economic upswing lasts from…

A

Trough to Peak

40
Q

To compare the GDP’s of country’s with different currencies we?

A

convert using the exchange rate

41
Q

The Exchange Rate is the

A

value or price of on currency in terms of another

41
Q

GDP Per Capita can be calculated by

A

GDP/ the population

42
Q

What makes a country better off, is the country with a _____ GDP

A

higher

43
Q

Investment Expenditure refers to

A

purchases of physical plant and equipment

44
Q

A country produces durable goods, non durable goods and inventories. describe each.

A

Durable Goods- long lasting goods(ex.fridge cars)
Non-Durable Goods- may not last forever (food, clothing)
Inventories(goods that one business has produced but has not yet sold to consumers, still sitting in warehouses)

45
Q

The largest part of GDP is

A

services (healthcare, education)

46
Q

The Smallest Part of GDP is

A

aggregate supply

47
Q

goods at the furthest stage of production at the end of the year are known as

A

Final Goods

48
Q

all the elements that affect peoples happiness and well being is known as

A

Standard of Living

49
Q

GDP is different from Standard of Living because GDP does not include:

A

Leisure time, Environmental cleanliness, learning, inequality in society, technology and products that are available, production that is not exchanged in the market

50
Q

a sustained increase in the overall level of prices and is measured by consumer price index is known as

A

Inflation

51
Q

Government expenditure includes spending of which levels of the government

A

All three(federal, state, and local)

52
Q

intermediate goods are

A

goods that go into producing other goods, these goods are excluded in statistics

53
Q

The calculation for nominal GDP is:

A

GDP Deflator X Real GDP

54
Q

The calculation for value is:

A

Price X Quantity

55
Q

if real GDP rises so does

A

employment

56
Q

The most significant problem with a recession is that

A

firms may need to layoff/ fire some workers

57
Q

A PPP-equivalent exchange rate provides

A

a longer run measure of the exchange rate

58
Q

The rise in GDP understates

A

The actual rise in the standard of living

Econ 102 (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions