Exam 1 - Quizzes Flashcards
What are the 3 goals of every macroeconomy?
Full employment, price stability, economic growth
What are the indicators of full employment? (3 goals)
Nonfarm payrolls, unemployment rate
What are the indicators of price stability? (3 goals)
CPI, “core” PCE deflator
What are the indicators of economic growth? (3 goals)
Real GDP growth
What is the most recent nonfarm payroll and unemployment rate? Are these indicators good? (3 goals)
142,000, 4.2%
What is the most recent CPI and “core” PCE deflator? Are these indicators good? (3 goals)
2.5%, 2.6%
What is the most recent real GDP growth? Are these indicators good? (3 goals)
3%
How do you calculate CPI? (price indices)
(sum(P_22Q_21))/(sum(P_21Q_21))
How do you calculate rate of inflation? (price indices)
(CPI_22-CPI_21)/(CPI_21)
How do you calculate nominal GDP (aggregate output)? (price indices)
sum(P_22*Q_22)
How do you calculate real GDP (adjusted-for-inflation product level)?
sum(P_21*Q_22)
How do you calculate the GDP deflator (implicit price deflator)? (price indices)
(Nominal GDP)/(Real GDP)
The purchasing power of money…
rises when prices fall.
Which of the following is an example of fiat money?
1.) a cowry shell used as money on a South Pacific island
2.) a gold coin used as money in nineteenth century England
3.) a Federal Reserve Note used as money in the twenty-first century United States
4.) a pound of salt used as money in medieval France
3.) a Federal Reserve Note used as money in the twenty-first century United States
All of the following are characteristics of debit cars EXCEPT:
1.) payments are deferred until a later date
2.) they can be used like checks.
3.) they eliminate the problem of trust since the bank’s computer authorizes the transaction.
4.) when used at a store, the user’s bank instantly credits the store’s account with the amount and deducts it from the user’s account.
1.) payments are deferred until a later date
