Macro Quiz Flashcards
Business Cycle Diagram
Shows a nation’s GDP with peak, trough, peak
What is GDP
Total monetary value of goods and services
What is included in GDP
Consumption, investments, government spending, and exports minus imports.
Nominal
GDP without inflation
Real
GDP adjusted for inflation
Per capita
Total GDP divided by the number of people
Structural unemployment
Technology replaces humans
and seasonal jobs
Cyclical unemployment
The economy causes people to be fired.
Frictional unemployment
Quitting to find another job
Cost-push inflation
Prices increase because of materials and wages
Demand-pull inflation
Total supply cannot support the total demand
CPI
The average change over time is told by prices.
Who controls monetary policy?
The Federal Reserve.
Who controls fiscal policy?
Executive and legislative branches
Absolute advantage
The party that can produce more no matter what
