Lesson 9 Flashcards
Macroeconomics
he study of economic factors that are reflective of the entire economy, such as the gross domestic product (GDP), inflation rate, interest rate, or unemployment rate.
Microeconomics
the study of factors that impact small or individual economies, such as supply and demand for a product.
Gross Domestic Product (GDP)
measures the total output of a country over a period of time. Output represents the fair market value of goods and services that are produced each year and is measured on a quarterly basis. It is important to note that these goods and services are produced from both labor and capital located within a country’s borders. GDP is often relied on to measure the size of the economy and determine where the economy is in the business cycle.
difference between Gross Domestic Product and Gross National Product?
gross national product measures the economic output of a country’s citizens - whether that output is produced domestically or in a foreign country.
- A Russian national hockey player that plays professional hockey in the US would be included in the US GDP and in the Russian GNP.
- A US businessman who owns a manufacturing company in China would be included in the US GNP and in the Chinese GDP.
Consumer Price Index (CPI)
measures the overall price levels for a basket of goods and services consumers may purchase:
- Food and Beverages: milk, coffee, cereal
- Housing: rent, mortgage
- Transportation: new vehicles, airline fares, gasoline, insurance
- Medical Care: prescription drugs, physician services, dental care, eye care
- Recreation: televisions, computers, toys, pet products
- Education and Communication: college tuition, postage, computer software
- Other Good and Services: tobacco, haircuts, personal expenses
Unemployment Classifications
U-1 - Comprised of individuals who have been unemployed for 15 weeks or longer compared to the overall labor force.
U-2 - Comprised of individuals who lost their jobs compared to the overall labor force.
U-4 - Comprised of unemployed individuals and discouraged workers compared to the overall labor force plus the total of discouraged workers.
U-5 - Comprised of unemployed individuals and marginally attached workers compared to the overall labor force plus the total of marginally attached workers.
U-6 - Comprised of unemployed individuals, discouraged workers, marginally attached workers, and underemployed workers compared to the overall labor force plus the total of marginally attached workers.
marginally attached workers
Marginally attached workers include discouraged workers and also include individuals who are available to work, want to work, and have looked for a job at some point within the past 12 months, but they weren’t’ considered unemployed because they hadn’t search for work in the four weeks prior to the survey being given.
discouraged workers
discouraged workers are individuals who are ready and willing to work, but have given up on looking for or applying to jobs primarily because they believed no jobs were actually available or that they did not qualify for any jobs potentially due to lack of experience, lack of education, or age discrimination
underemployed workers
Underemployed workers are individuals who are technically overqualified for their current positions and are currently working in part-time positions. A popular example of this is the PhD student who is working part-time at Starbucks.
