Measuring the Economy

Question 0

Real GDP vs. Nominal GDP

Answer 0

Real GDP- comparison how we did last year to this year

Nominal GDP- measures on how much we did just this year

Question 1

GDP(Gross Domestic Product)

Answer 1

The dollar value of all final goods and services produced within countries border per year

Question 2

Intermediate goods

Answer 2

Goods used in the production of other goods

Question 3

Durable vs. Nondurable goods

Answer 3

Durable goods- goods that last a long time

Nondurable goods- goods that last for short period of time

Question 4

Aggregate Supply & Demand

Answer 4

Aggregate supply- counts for everything that’s available

Aggregate demand- what people want

Question 5

Business Cycle

Answer 5

Expansion- businesses are growing

Peak(top)- where there are lowest # of unemployment rate

Contraction- businesses are going down, people are also getting fired

Trough(bottom)- high rate of unemployment

Question 6

Real GDP per Capita

Answer 6

GDP/ # of people:
If # is high- people are better off
If # is low- people are in lower standard of living

Question 7

Saving Rate

Answer 7

The proportion of disposable income that is saved 
Ex: $1000- money coming in
    --$700-expenses
=$300- left over 
  --$200- fun\$\$$
=$100/$300= 33%= saving rate