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quiz 1 Flashcards

1
Q

Macroeconomic

A

study of the market as a whole
- economic acoregates (meaning it measures overall behaviors and performance of an eco)

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2
Q

First main measures

A
  1. some measures of economic output
  • commonly measures with GDP
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3
Q

Gross Domestic Product (GDP)

A

total money value of newly produced final good & service produce in a domestic economy in the course of a year transaction through organized market

  • aka National Income
  • NOT A GOOD MEASURE OF LIVING STANDARDS (welfare)
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4
Q

What is U.S. GDP

A

$28.6 trillion/yr

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5
Q

National income

A

all money paid in to firms is ultimately paid out & become income
(Income earned by ppl and reflects the flow of money in the eco)

Paid out –> wage, profit, rents, interest

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6
Q

Why is GDP not a good measure of living standards (1)

A
  1. not adjusted for population differences
    ex: GDP Switzerland ~ GDP india
    population of india ~ 140x of swits

per capital GDP (per person)=
GDP / Population

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7
Q

Why is GDP not a good measure of living standards (2)

A

not adjusted for environmental damange
• doesn’t account for the negative impact on environment
• ex: pollution, deforestation usually increase GDP

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8
Q

Why is GDP not a good measure of living standards (3)

A

not adjusted for diferences in how much economic activity is recorded
(unreported labor, trades, small business, underground eco)

ex:
US per capital GDP ~ $60000
Haiti per capital GDP ~ $250

differences 240x (60000/250)

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9
Q

Why is GDP not a good measure of living standards (4)

A

similar changes in GDP can occur for good or bad reasons

good: higher GDP -> ↑ growth & productivity

bad: recovering from a disaster

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10
Q

Why is GDP not a good measure of living standards (5)

A

not adjusted for differences in leisure time

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11
Q

Why is GDP not a good measure of living standards (6)

A

not adjusted for differences in cost of living

ex: price of hair cut differs for each country

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12
Q

2nd Main Measure

A

soem measure of overall cost of living

  • commonly measures w △ in consumer pricde index (CPI)
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13
Q

what is US CPI (inflation)

A

2.9%

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14
Q

3rd Main measures

A

some measure of how many people are working/not working

  • focus more on unemployment
  • commonly measure w unemployment rate
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15
Q

what is US unemployment rate

A

4.2%

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16
Q

recession

A

sustained decrease in real GDP –> output decrease
- “sustained” = 6 mths or longer
- normal but rare of rUS

17
Q

National Bureau of Economic Research (NBER)

A

determines if/when
US is in recessions

18
Q

depression

A

extremely severe recession

  • “extremely severe” in term of LENGTH n DEPTH (how much of a downturn)
  • extremely rare
  • last depression: 1930
19
Q

nominal statistic

A

unadjusted n current statistics

20
Q

real statistic

A

remove affects of any change in prices or prive level

  • ex: assume a worker received a raise of 6%
  • inflation = 2.9%
  • nominal raise = 6%
    REAL RAISE = 3.1% (6-2.9)
    (inflation adjusted)
21
Q

nominal GDP equations
(NGDP)

A

current yr output - current year price

  • can change due to △ in output, price, or both
22
Q

real GDP equation
(RGDP)

A

current yr output &. price of a consistent yr

  • ONLY △ due to △ in output
23
Q

1st case that cause ↑ in NGDP

A

outputs ←→ x prices ↑ = ↑ NGDP

24
Q

2nd case that cause ↑ in NGDP

A

outputs ↑ x prices ←→ = ↑ NGDP

25
Q

3rd case that cause ↑ in NGDP

A

outputs ↑ x prices ↑ = ↑ NGDP

26
Q

4th case that cause ↑ in NGDP

A

outputs little ↓ x prices big ↑ = ↑ NGDP

27
Q

5th case that cause ↑ in NGDP

A

outputs big ↑ x prices little ↓ = ↑ NGDP

28
Q

price level (PL)

A

weighte average of prices int he economy

  • “weighted avg” -> some goods/services are more important
29
Q

consumer price index (CPI)

A

weighted avg of prices of newly produced FINAL goods/services purchased by typical consumers

30
Q

Bureau of Labor Statistic (BLS)

A

responsible fpr recording + reporting CPI & does monthly survey in person

  • except for housing –> collected by phone
31
Q

inflation

A

sustained increase in overall price level

  • normal + common in US
32
Q

deflation

A

sustained decrease in overall price level

  • rare + dangerous
  • avg price ↓ = supply ↓ demand ↑
33
Q

disinflation

A

slow down in rate of inflation
- inflation but more moderate
- ex:
21 - 1%
22 - 2%
23 - 3%
24 - 2%
25 - 1%

34
Q

hyperinflation

A

excessively high rate of inflations
2.9 –> 20%

35
Q

stagflation

A

stagnating (recession) economy + inflation
- normal but rare in US

econ 202 (5 decks)

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