Econ test #2 Flashcards
Included in GDP
actually produced (isn’t a part in producing something else), here (made in U.S.), and legal
Not included
stocks/bonds, intermediate goods, used goods (produced in pervious years), transfer payments (government)
C,I,G
C= consumer spending
I= investment/business spending
G= government spending
Xn= net exports
rGDP
adjusted for inflation
GDP triangle (when you had 2 variables and looking for the 3rd)
nominal/real x deflator then multiply that by 100
Inflation rate
CPI new - old/ old times 100
Base year
GDP deflator & CPI are always 100 in base year
gross nominal GDP
total cost for year
Inflation rate between years
CPI new - CPI old / CPI old x 100 (its asking to compare inflation rates)
CPI
Consumer price index
real GDP
nominal GDP / deflator times 100
% change in prices between 2 years given CPI
year 2 - year 1 / year 1 times 100
percentage increase
current output x current prices / current output x base year prices
% increase in real GDP
Real GPD new - Real GDP old / GDP old x 100
to find real GDP of a new year
current output x base year prices prices
