MACROeconomics Chapt. 2 Flashcards
the plural of “anecdote” is
“data”
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
Gross Domestic Product, GDP
is the market value of all final goods and services produced within an economy in a given period of time
nation’s total income
computed every 3 months by the Bureau of Economic Analysis
considered best measure of how well the economy is performing
- total income of everyone in the country
- total expenditure on the economy output of goods and services
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
consumer price index, CPI
measure the levels of prices
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
unemployment rate
the fraction of workers who are unemployed
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
how can GDP measure both the economy’s income and its expenditure on output?
for the economy as a whole, income must equal expenditure
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
national income accounting
accounting system used to measure GDP and many related statistics
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
the circular flow
GDP is both total expenditure and total income
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
2 ways of computing GDP
- total income
- total expenditure
circular flow
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
stock
a quantity measured at a given point in time
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
flow
is a quantity measured per unit of time
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
a persons wealth is a stock
her income and expenditures are flows
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
of unemployed people is a stock
of people losing their jobs is a flow
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
amount of capital in the economy is a stock
amount of investment is a flow
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
government debt is a stock
government budget deficit is a flow
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
used goods
arenot calculated in the GDP, only currently produced goods & services
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
the treatment of inventories
- when a firm increases its inventory = expenditure = increase GDP = to production for final sale.
- a sale out of inventory = positive spending & negative spending combo = does not affect GDP
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
intermediate goods
GDP includes only the value of final goods
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
value added
the value of the firm’s output less the value of the intermediate goods that the firm purchases
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
imputed value
an assumed value given to an item when the actual value is not known or available
housing
government services
underground market
drug trade
under the table
https://www.google.com/search?q=define+imputed+value&rlz=1C1CHBD_enAT894AT894&oq=define+imputed+value&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIICAEQABgWGB4yCAgCEAAYFhgeMggIAxAAGBYYHjIKCAQQABgPGBYYHjIKCAUQABgPGBYYHjINCAYQABiGAxiABBiKBTINCAcQABiGAxiABBiKBdIBCTUxNjBqMGoxNagCALACAA&sourceid=chrome&ie=UTF-8
nominal GDP
value of goods and services measured at current prices
can raise GDP due to price and or quantity rises
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
real GDP
value of goods and services measured using a constant set of prices
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
GDP deflator
measures the price of output relative to its price in the base-year
page 25
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
chain-weighted measures of real GDP
year-to-year growth rates put together to form a chain that can be used to compare the output of goods and services between any two dates
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
the components of expenditure
consumption (C)
investment (I)
government purchases (G)
net exports (NX)
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
national income accounts identity
GDP = Y
Y=C+I+G+NX
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
identity
an equation that must hold because of the way the variables are defined
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
consumption
consists of goods and services bought by households
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
3 consumption catagories
- nondurable goods
- durable goods
- services
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
investment
goods bought for future use
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
government purchases
goods and services bought by federal, state, and local governments
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
net exports
value of goods and services sold to other countries (exports) minus the value of goods and services that foreigners sell us (imports)
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
GNP
= GDP + factor payment s from abroad minus factor payments to abroad
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
NNP
net national product
NNP=GNP - Depreciation
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
national income accounts divide national income into 6 catagories
- compensation of employees
- proprietors income
- rental income
- corporate profits
- net interest
- indirect business taxes
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
personal income =
= national income
- indirect business taxes
- corporate profits
- social insurance contributions
- net interest
+ dividends
+govenments transfers to individuals
+ personal interest income
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
disposable personal income =
= personal income - personal tax and nontax payments
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
seasonal adjustment
the output of the economy rises during the year, reaching the peak in the fourth quarter, then falling in the next first quarter
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
seasonally adjusted
data have been adjusted to remove the regular seasonal fluctuations
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
measuring the cost of living
the consumer price index
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
inflation
increase in the overall level of prices
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
CPI, consumer price index
turns the price of many goods and services into a single index measuring the overall level of prices
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
core inflation
measures the increase in price of a consumer basket that excludes food and energy products
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
why measure “core inflation”
bc food and energy prices = short-term volatility, core inflation is sometimes viewed as a better gauge of ongoing inflation trends
Mankiw, N. (January 1, 2014). Macroeconomics (7th edition, 17-42). Cengage Learning.
