Domestic Macroeconomics Flashcards
What is standard of living
It is defined as the amount of goods and services available for a country’s residents for consumption
Indicator for Material SoL
GDP: The monetary value of all final goods and services produced by residents within the geographical boundaries of a country
GNP: It is the monetary value of all final goods and services produced by nationals of a country, irrespective of location of production
What is purchasing power parity
Purchasing power parity measures the amount of foreign currencies needed to buy the same basket of goods and services in two different countries
What is actual economic growth?
It refers to an increase in the country’s output level or real national income over a period of time
What is the formula for the multiplier effect?
k =1/(1 − MPC)
