Macro - Cycle 1

Question 1

What does GDP stand for

Answer 1

gross domestic product

Question 2

What does GDP do

Answer 2

measures total value of national output of goods in a given time period

Question 3

How is GDP calculated

Answer 3

Consumption + Gov. spending + Investment spending + (exports - imports)

Question 4

How is GDP calculated - with income

Answer 4

wage income + profit from sectors + rental income

Question 5

what’s nominal GDP

Answer 5

gives monetary value for data
expressed at current prices
less accurate and more simple

Question 6

what’s real GDP

Answer 6

adjusted to effects of inflation
prices kept at level of base year
data at constant prices

Question 7

how to turn nominal GDP to real GDP

Answer 7

(nominal value current year/ price index in current year) x 100

Question 8

what’s economic growth

Answer 8

sustained growth of real GDP over time

Question 9

how to find GDP per capita

Answer 9

total real GDP/ Population

Question 10

what does GNI stand for

Answer 10

Gross national income

Question 11

What does GNI do

Answer 11

measures wealth
calculus income instead of output

Question 12

How to calculate GNI

Answer 12

Nominal GDP + Net primary income + Net secondary income

Question 13

What are other alternates of GDP

Answer 13

Green GDP
Happiness index
HDI - human development index

Question 14

How to measure living standards

Answer 14

Disposable income
Human capital
National contributions

Question 15

What is disposable income

Answer 15

amount of money one has available to spend and save after direct taxes

Question 16

Limitations of per capita measurements

Answer 16

Changes in distribution income
Change in working conditions

Question 17

What does the Gini coefficient do

Answer 17

measure of inequality and equality in a country

Question 18

Why is GDP flawed to see living standard

Answer 18

only economic factors
doesn’t include :
education
literacy rates
healthcare
pollution
digital economy

Question 19

what is economic wellbeing

Answer 19

overall quality of life and material prosperity enjoyed by one

Question 20

What is the easterlin paradox

Answer 20

life satisfaction rises with average income but to a point

Question 21

Why is it good to convert GDP to per capita

Answer 21

to understand production with regards to population and country size

Question 22

What does PPP stand for

Answer 22

Purchasing power parity

Question 23

What is PPP

Answer 23

idea that items cost the same in different counties based on exchange rates

Question 24

How is PPP calculated

Answer 24

comparing price of a basket of goods and services in different countries

Question 25

What is inflation

Answer 25

sustained rise in an economy’s price level

Question 26

What is hyper inflation

Answer 26

phase of rapid inflation

Question 27

What is deflation

Answer 27

sustained period when general price for goods fall

Question 28

What is disinflation

Answer 28

fall of inflation but doesn’t print price deflation

Question 29

What is stagflation

Answer 29

combination of slow economic growth, rising unemployment and high rising inflation

Question 30

what is wage price spiral

Answer 30

when inflation is expected to rise
people ask for higher salaries
further pushing inflation

Question 31

How to calculate inflation

Answer 31

CPI - consumer price index

Question 32

What is CPI

Answer 32

tracks changes in avg price
of basket of goods by one over time

Question 33

What is CPI - refer to weights

Answer 33

weighted price index
based on spending patterns of households

Question 34

How is CPI calculated

Answer 34

(weight x price) / base year (100)

Question 35

Limitations of CPI

Answer 35

consumer preferences evolve
doesn’t account quality changes
represents average consumer