common macro aggregates Flashcards
what is national output
total of everything produced in a country in some period of time. it is a aggregate because its measured in different ways since we are adding different variables together. basically gdp
how do we add different variables eg apples and oranges
look for what they have in common
why is national output equal to national income
because what is produced is also sold and bought so its like a cycle
what is potential output
its the maximum output if the country was fully efficient ( tech and everything)
labor source
the amount of people that can work ( 15 and above)
labor fource
the amount of people how can and want to work
labor force participation rate
the ratio of people who can work that want to work labor force divided by working age population
employment
the amount of people who do work
unemployment
the amount of people who want to work but cant
unemployment rate calculation
people working divided by the people not working times 100 ( both are eligible to work )
frictional unemployment
lose / leave your job to find a new (better) one basically in-between jobs
structural unemployment
lose your job because of new tech / innovations
cyclical unemployment
lose job because of a recession
natural rate unemployment
fluctuations in demand cause you to lose your job
true unemployment
people that just gave up
Productivity
measures output per unit of input, such as labor, capital
cpi
consumer price index, measures a basket of goods bought by a typical consumer used to measure inflation
how to calculate cpi
price of the given goods of that year divided by the base year
what is interest rate
price we pay for borrowing to have stuff now
real vs nominal interest rate
real interest is adjusted for inflation nominal isn’t
fisher equation
nominal interest = real interest + inflation rate
What is the exchange rate
its the value of one countries currency vs another
How do the exchange rate fluctuations influence international trade patterns
the lower the value of the currency the lower the value of imports are and the higher the value of exports are so they are inversely related just think logically if cad goes down us milk isnt as worth it for cad but if cad price goes down then its worth for us ppl to come n buy
output gap
actual gdp vs potential or real gnp and real gdp
national product
gnp for short is the estimated total value of all goods and services by the people of the country and not other countries
gdp
its the market value of all goods produced in a countries border
gdp vs gnp
gdp measures the goods and services in the border of the country but those goods can be made by international businesses and it will still count gnp is the value of the goods a services produced by a countries citizens in the country and abroad in different countries
