Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Econ202 > Exam 1 > Flashcards

Exam 1 Flashcards

(53 cards)

Start Studying
1
Q

gross domestic product

A

the market value of all final goods and services produced in a country during a period of time, typically one year

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

market value=

A

price x quantity

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

GDP=

A

total production=total income=total spending

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

components of GDP

A

consumption, investment, gov. purchases, net exports

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

consumption

A

largest portion of GDP. services, nondurable goods, durable goods

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

investment

A

spending on new homes, firm spending on new factories or equipment, NOT stocks or bonds

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

government purchases

A

federal, state, and local spending on things like highways or teacher salaries. NOT transfer payments

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

net exports=

A

exports-imports (can be negative)

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

GDP equation

A

Y=C+I+G+NX

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

real GDP=

A
  • measures current prices at a base year

- current quantities x base year prices

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

GDP deflator=

A
  • measures price level

- nominal GDP/real GDP x 100

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

adult working age population

A

every single person in the country 16 and above that are not instituionalized

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

labor force=

A

number of people employed + number of people unemployed

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

employed

A

people who worked at least 1 hour in the week

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

unemployed

A

someone that is not currently working but is available for work and has actively looked for a job within the past month

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

not in the labor force=

A

adult working population-labor force

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

discouraged worker

A

someone who would like to work but has given up looking for jobs

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

unemployment rate=

A

unemployed/labor force x 100

(also)- unemployed/employed + unemployed x 100

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

labor force participation rate=

A

labor force/adult working age population x 100

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

employment to population ratio=

A

employed/working age population x 100

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

frictional unemployment

A
  • related to the job search
  • typically short term
  • can be seasonal (lifeguard)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

structural unemployment

Study These Flashcards
A
  • related to mismatch in skills

- tends to be long term

23
Q

cyclical unemployment

Study These Flashcards
A
  • caused by a business cycle recession

- when cyclical unemployment=0, the economy is at full employment

24
Q

natural rate of unemployment

Study These Flashcards
A
  • the unemployment rate when the economy is at full employment
  • the US is between 5 and 5.5%
25
causes of unemployment
- unemployment insurance - minimum wage - labor unions - efficiency wages
26
Consumer Price Index (CPI)
a measure of the average change over time in prices a typical urban family of 4 pays for the goods/services they buy
27
CPI=
cost of basket in current year/cost of basket in base year x 100 (basket meaning the total price of everything the family has in their cart at Walmart)
28
Inflation rate in year 2=
CPI in year 2 - CPI in year 1/ CPI in year 1 x 100 | CPI is not the inflation, but inflation is the % change in CPI
29
substitution bias
consumers may change their purchasing habits away from goods that have increased in price
30
increase in quality bias
difficult to separate improvement in quality from increase in price (smartphones)
31
new product bias
the basket of goods changes only every 10 years. Big delay in including new goods like cell phones.
32
outlet bias
CPI uses the full retail price but people may buy from discount stores or online to get things cheaper than full price
33
Producer Price Index
same idea as CPI but it reflects the cost of a basket of goods purchased by producers
34
PPI=
cost of basket in current year (for producers) / cost of basket in base year x 100
35
nominal value
value measured in current year dollars
36
real value
value that is adjusted for inflation
37
real value=
nominal value/ CPI x 100
38
nominal interest rate
the interest rate that a bank quotes for a loan
39
real interest rate
the nominal interest rate adjusted for inflation
40
Real Interest rate=
nominal interest rate - inflation
41
anticipated inflation
- increased real cost of holding cash - firms have menu costs (takes time for firms to change prices) - investors are taxed on nominal returns rather than real returns which can result in higher tax being due
42
unanticipated inflation
when its hard to predict inflation, makes it hard to make good borrowing and lending decisions
43
real GDP per capita
- the amount of production in the economy per person adjusted for changes in price level - measures standard of living
44
real GDP per capita=
real GDP/population
45
economic growth
the process by which rising productivity increases the average standard of living (increases in real GDP per capita)
46
growth rate between any 2 years=
value in year 2 - value in year 1 / value in year 1 x 100
47
rule of 70
approximate time to double = 70/(growth rate in percent form)
48
financial system
the system of financial markets and financial intermediaries through which firms acquire funds from households
49
risk sharing
allows investors to spread money over many different assets thereby reducing the risk for any single investor while maintaining a high expected return
50
liquidity
allows savers to quickly convert investments to cash
51
information
prices represent beliefs about future revenue stream. aggregation of info makes funds flow to the right firms
52
private savings
a household income that is NOT spent | Sprivate= Y +TR - C - T
53
public savings
whatever the government brings in but does not spend | Spublic = T -G - TR

Econ202 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions