Midterm Flashcards

1
Q

Macroeconomic

A

The study of the entire economy
It’s purpose is to understand the entire economy’s changes that impact us

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Exogenous variables

A

• determined outside of the model
•given
•not calculated by us

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Endogenous variables

A

•variables determined inside of the model
• calculated by us using given information

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Nominal variables

A

Variables measured in current dollars
Not adjusted for inflation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Real variables

A

Adjusted for inflation
Measured in constant dollars

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Flow variables

A

Variables that represent consistent changes per unit of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Stock variables

A

Variables that measure changes in quantity not over a specific period of time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Static models

A

Doesn’t depend on how much time has passed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Dynamic models

A

Depends on how much time has passed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Gross domestic product

A

Final value of goods and services produced in a country in a given time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

The four categories GDP consists of:

A
  1. Consumption
  2. Investment
  3. Government spending
  4. Net exports
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Product expenditure identity

A

IM+Y=C+G+I+Ex

Y=C+G+I+(EX-IM)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Disposable income identity

A

Yd=Y-T+TP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Sectorial Deficit Identity

A

(G-T+TP)+(I+S)+X=0

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Inflow-Outflow identity

A

I+G+TP+EX=S+T+IM

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Price index

A

Overall measure of price level across a variety of goods

17
Q

Price index examples

A

CPI
PPI
GDP deflator

18
Q

Price factor

A

Price factor = (price index base year)/price index measured year)

19
Q

Real value (formula):

A

Real=Nominal x price factor

20
Q

CPI

A

Measures the change in price of a market basket of goods and services over time.

21
Q

Included in GDP

A

Must include only transactions that are truly exchanges

22
Q

GDP doesn’t include:

A
  1. Secondhand sales
  2. Transfer payments
  3. Intermediate goods
  4. Under the table transactions
23
Q

What is GDP used for?

A

GDP is used as a standardized measurement to calculate the size of an economy.
• the percentage change of GDP can tell us the growth of the economy

24
Q

Recession

A

2 consecutive quarters of negative economic growth

25
Q

Depression

A

4 consecutive quarters of negative economic growth

26
Q

What does the production function measure?

A

The production function measured the relationship between inputs and outputs.

Inputs include:
Capital stock
Labor
Technology

27
Q

Diminishing marginal products

A

After a certain point continuing to add units of labor does not bring additional units of output

28
Q

Cobb-Douglass production function

A

F(K,L,A)= AK^ㅇL^(1-ㅇ)

29
Q

What does “A” stand for?

A

Is the measure of technology sometimes called the total factor productivity

Measure of the multiple of production

30
Q

Marginal product of labor (MPL)

A

How much additional output do we get when adding one more unit of labor

31
Q

Marginal product of capital

A

How much additional output do we get when we add one more unit of capital

32
Q

Factors of production are:

A

All the things brought together to aid in the production of goods and services
Knowledge
Capital
Entrepreneurship
Labor
Land