Unit 1 Test Flashcards
What is the equation to find price index?
Price index= market basket current year divided by market basket base year times 100
What is the equation used to find the inflation rate?
Inflation rate= price in year 2 minus price in year 1 divided by price in year 1 times 100
Another equation for inflation rate (the one with PIs)
Price index year 2 minus price index year 1 divided by price index year 1 times 100
CPI stands for____?
Consumer price index
How to find the CPI for data:
Current year divided by base year times 100
Equation to find price index in a year
Cost of MB in a given year divided by cost of MB in base year times 100
How to measure the labor force participation rate
LFPR= Labor force divided by population times 100
How to measure unemployment rate
UR= number of unemployed divided by labor force times 100
T or F: a person must be actively looking for work to be considered unemployed
T
How to calculate percent change
Percent change= change in CPI divided by beginning CPI times 100
How to calculate real GDP in a given year
Real GDP= Nominal GDP divided by (price index divided by 100)
How to calculate output growth
Output growth= (Real GDP in year 2 minus real GDP in year 1) divided by real GDP in year 1 times 100
Calculating GDP
GDP= C + I + G + Xn
What are shoe-leather costs?
When people avoid holding money
What are menu costs?
The “cost”of inflation
