MMacro Flashcards
Real GDP
-Represents the total value of all goods and services produced within a country, expressed in constant prices to account for changes in purchasing power over time.
What is the current level of real GDP for the U.S?
22.67 trillion
what country has the highest real GDP?
China
How much is the per capita real GDP in the U.S
About $70,000
What country has the highest per capita real GDP
Luxembourg (127,673)
Where does the U.S rank based on per capita real GDP?
7th
What country has the highest self expressed happiness?
Finland
Where does the U.S rank in terms of self expressed happiness
19th
Inflation
the general increase in prices of goods and services over time, which results in the decrease in purchasing power of money.
Difference between nominal and real values?
nominal values are the raw numbers we deal with, while real values take into account changes in purchasing power over time, giving a more accurate reflection of something’s worth.
What is the current level of inflation in the U.S?
3.4%
Given the level of inflation, how long will it take for the real value of money to be cut in half?
20 years
What’s the 4 phases of the business cycle
Expansion: Rises after trough/growth
Peak: Highest point in a cycle
Recession: downturn after peak
Trough: Lowest point in a cycle
Discuss alternate ways of measuring an economy’s success behind real GDP or real per capita
-World happiness rankings
-Cost of living
-Unemployment rate
Most Americans believe that the U.S is the wealthiest economy in the world. Argue against this proposition.
Although the U.S has a high real GDP, the metric overlooks per capita and other elements like unreported income such as tips and access to healthcare, education, and other service providers
Compare and contrast U-3 and U-6 definition of unemployment
both U-3 and U-6 measure unemployment for unemplyed citizens, U-3 focuses on the actively unemployed, while U-6 focuses on additional groups like marginally attached workers and involuntary part-time workers.
What is the current U-3 unemployment rate
4%
Describe the most profound economic event since the birth of Christ
The Age of Enlightenment and the Industrial Revolution built up to the free market of ideas and the rise of democracy.
Explain why the numerical value of money is meaningless?
It’s worth depends on what you can exchange it for. Its value is relative and fluctuates based on what goods or services you can buy with it at any given time
Types of unemployment
-Cyclical
-Frictional
-Seasonal
-Structural
-Natural unemployment
-Long term unemployment
Occurs when people are between jobs, because they’re looking for a new one or just entering the workforce.
Frictional unemployment
When there’s a downturn in the economy, leading to fewer job opportunities as businesses cut back on production
Cyclical unemployment
When jobs are only available during certain times of the year, like holiday retail or agricultural work.
Seasonal unemployment
Arises from changes in the economy, like technological advancements or shifts in consumer preferences,
Structural unemployment
the ongoing level of unemployment that exists in an economy from frictional and structural
Natural unemployment
When individuals are unemployed for an extended period, typically beyond six months
Long term unemployment
Which three countries – outside of the U.S. – hold the most debt?
Japan, China, and UK
What are three largest sources of Federal tax revenue?
-individual income taxes
-payroll taxes
-corporate income taxes
Democrats complain that the rich do not pay their fair share of Federal taxes. Agree or disagree. Write a paragraph supporting your position.
disagree. high-income earners already contribute a good portion of total tax revenue. The top earners typically shoulder burden of federal income taxes, often paying a higher percentage of their income compared to lower-income individuals.
Define national debt
the total amount of money that a government owes to its creditors.
What proportion of the national debt is held by the public?
98%
Define U.S deficit
the difference between what the government spends and what it earns in revenue in a given year.
