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Economics GRADE 12 > Chapyer 9 > Flashcards

Chapyer 9 Flashcards

1
Q

Macroeconomics is the study of what?

A

Study of the economy as a whole (big picture)

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2
Q

What does macroeconomics measure? PEO

A

① output
② employment
③ price stability

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3
Q

What is GDP ?

A

Gross domestic product

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4
Q

What is the expenditure approach?

A

It adds up the total spent on all financial goods + services in one year

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5
Q

What is GDP formula?

A

C+ G + I + (X-M)

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6
Q

GDP FORMULA: What does the c stand for?

A

Consumption

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7
Q

GDP FORMULA: What does the g stand for?

A

Government purchases

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8
Q

GDP FORMULA: What does the I stand for?

A

Investments

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9
Q

GDP FORMULA: What does the X stand for?

A

Exports

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10
Q

GDP FORMULA: What does the M stand for?

A

Imports

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11
Q

Nominal GDP vs real GDP ?

A

Nominal: without inflation adjustment
Real: with adjustment for inflation

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12
Q

What is this the formula for?

Real GDP year 2 - real GDP year 1 / real GDP yr2

A

To calculate percentage growth in GDP

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13
Q

What on the drawbacks to unemployment: GUP

A

① PART TIME
Makes employment figure look better than it actually is

②UNDEREMPLOYED
Workers not being utilized to their potential

③GIVEN UP
People who are not actively looking for work

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14
Q

What is unemployment rate?

A

The percentage of the labour force not working

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15
Q

What is this:
People willing to work and an actively employed

A

Labour Force

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16
Q

How to calculate unemployment rate?

A

(# Of unemployed / employed) x 100

17
Q

What are some issues from high unemployment?

A

Crime, political unrest, employment insurance, social costs

18
Q

What is fictional unemployment? And why can it never be 0?

A

People moving between jobs + grad students so that is why it can never be 0%

19
Q

What is CPI?

A

Consumer price index: tool used t track inflation

20
Q

Formula to calculate inflation?

A

(CPI yr 2 - CPI yr 1 / CPI yr 1

21
Q

What is indexing?

A

Adjusting wages to affect year to year price changes

22
Q

CPI limitations?

A

① WEIGHING OF CATEGORIES AND ITEMS IN EACH
Not all household spending reflects CPI weight

② CULTURAL DIVERSITY
Impact of price changes on household varies depending on culture

23
Q

EXPLAIN: Carbon tax

A

Charges a minimum for fossil fuels → prices reflect environmental costs

24
Q

EXPLAIN: cap and trade

A

Government sets the cap for pollution for certain industries:
Price driven by supply + demand

25
Q

List ONLY drawbacks to GDP? PUNTED

A

1.POPULATION SIZE

  1. NON MARKET POPDUCTION NOT MEASURED

3.UNDERGROUND ECONOMY

4.TYPES OF GOODS PRODUCED

5.ENVIRONMENTAL DEGRATION

  1. DISTRIBUTION OF INCOME

Economics GRADE 12 (5 decks)

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