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Micro Econ > GDP Test > Flashcards

GDP Test Flashcards

1
Q

GDP

A

All goods and services produced in a country in 1 year (QUANTITY) [Final goods produced within the US]

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2
Q

GDP Does not include

A

Used Products, Transfer payments, stocks/bonds, at home services. intermediate/ foreign services

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3
Q

Ways to Measure GDP

A

Value of PRODUCTION of final goods and services, Value of spending on final goods and services, Factor Income

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4
Q

GDP Equation

A

C (Consumer Spending) + I (Investment Spending) + G (Government Spending) + Xn (Exports - Imports)

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5
Q

GDP Faults

A

It does not measure prosperity or standard of living

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6
Q

Umemployed

A

People not employed but ACTIVELY looking for work

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7
Q

Labor Force

A

Unemployed + Employed

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8
Q

Labor Force Participation Rate

A

(Labor Force/ Population Aged) * 100

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9
Q

Unemployment Rate

A

(# Unemployed/ Labor Force) * 100

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10
Q

Discouraged Workers

A

Not employed and not looking

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11
Q

U3

A

Official Unemployment Rate

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12
Q

U6

A

Unemployment rate + Includes discouraged, marginally attached workers, and half time workers

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13
Q

Frictional Unemployment

A

New opportunities/ Jobs

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14
Q

Structural

A

More people looking then jobs OR obsolete workers/ jobs gone

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15
Q

Cyclical

A

During recessions, layoffs

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16
Q

Natural Rate of Unemployment

A

Frictional + Structural

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17
Q

Actual Rate of Unemployment

A

(Frictional + Structural (Which is Natural)) + Cyclical

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18
Q

CPI

A

Changes in Price

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19
Q

Market Basket

A

(Price * Quantity) Consumer Expenditures

20
Q

CPI Equation

A

(Market Basket Current Year/ Market Basket Base year) * 100

21
Q

Rate of Change

A

((New-old)/ Old) * 100

22
Q

Nominal

A

Not adjusted for inflation

23
Q

Real

A

Adjusted for inflation

24
Q

Real Value

A

Nominal Value/ (Price Index/100)

25
Q

CPI of different items

A

Changes at different rates

26
Q

Substitution Bias

A

As prices rise, consumers switch goods but it appears as though consumers have lost purchasing power

27
Q

Things CPI doesn’t account for

A

Substitution Bias, Unmeasured quality changes, Prices rising and falling drastically

28
Q

Inflation Rising causes

A

purchasing power to decrease

29
Q

Nominal GDP =

A

(Price Level/Index * Real GDP (Y)) OR (Pcy *Qcy) OR (Real GDP *(Aggregate Price Level/100))

30
Q

Nominal GDP measures

A

How much is spent on output in a given period and the value of aggregate output

31
Q

Real GDP

A

Measure of how much the value of aggregate output in constant dollars

32
Q

Real GDP =

A

(Pby * Qcy) OR ((Nominal GDP/ Aggregate Price Level) *100) Real and Nominal GDP are equal to each other at the base

33
Q

GDP Deflator is

A

Changes in prices for all goods and services which show us the aggregate price level

34
Q

GDP Deflator (Implicit price deflator) =

A

((Nominal GDP/ Real GDP) * 100)

35
Q

Inflation Rate =

A

((GDP Deflator cy - GDP Deflator by)/GDP Deflator by ) * 100 OR CPI subsitute

36
Q

CPI Deflator

A

Purchasing Power changing over time ( Changes in Price, Quantity is constant) [Tracking just C]

37
Q

GDP Deflator

A

Output has changed over time (Price is constant, Quantity is changing) [ Tracking C, I, G and Xn]

38
Q

Output (Increasing on graph)

A

When output is increasing employment is rising

39
Q

Recession (going down on graph)

A

Output is decreasing and employment is falling

40
Q

Line diagonal across the graph

A

The potential output

41
Q

Actual Output = Potential Output

A

Unemployment Rate = Natural Rate of Unemployment

42
Q

Actual Output < Potential Output

A

UR > NRU

43
Q

Expenditures

A

Purchases

44
Q

Expenditure Side of GDP =

A

Income Side of GDP

45
Q

Income

A

Who received incomes generated by products.

46
Q

Output Gap

A

Diff between actual and potential GDP

Micro Econ (3 decks)

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