Midterm 2 equations Flashcards
1
Q
Unemployment rate
A
Unemployed/working-able population
2
Q
Participation rate
A
Employed+unemployed/total population
3
Q
Wage equation
A
4
Q
Production function
A
Note that we often assume A=1 so in the end production depends solely on the cost of employing a worker
5
Q
Price setting equation
A
6
Q
Price setting relation
A
determines real wages
7
Q
Natural rate of unemployment
A
8
Q
What relation do the price setting and wage setting equations have through the NRU?
A
9
Q
Aggregate Supply
A
Note that 1-Y/L is the equation for unemployment
10
Q
What does Aggregate supply say about Expected price level compared to actual price level?
A
11
Q
Aggregate demand
A
12
Q
AD relation (?)
A
13
Q
Exchange rate of a country in terms of another
A
14
Q
What’s a surplus and deficit in the current account?
A
15
Q
GNP
A
