Aggregate Output, Price, and Economic Growth Flashcards Preview

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Flashcards in Aggregate Output, Price, and Economic Growth Deck (16):
1

Calculate/explain GDP using expenditure and income approaches

Income - total income earned by all households and businesses in a country during a period

Expenditure - total amount spent on goods and services produced in that country during a period

2

Compare sum-of-value and value-of-final-output methods of calculating GDP

Sum-of-value adds up each value-add at each level of production.

Value-of-final-output only looks at final price

3

Compare nominal and real GDP

Nominal GDP looks at current prices, while real GDP looks at it as though prices did not change

4

Calculate GDP deflator

Value of current year output at current year prices DIVIDED BY value of current year output at base prices TIMES 100

5

Compare GDP, national income, personal income, and personal disposable income

GDP - broadest measure of economy incl. households, business, government, and foreign sectors

National income - income received by all factors of production used in generation of a final output

Personal income - closely watched for consumer spending

Personal disposable income - most relevant measure b/c it is final, after-tax number

6

Explain fundamental relationship among saving, investment, the fiscal balance, and trade balance

S = I + (G - T) + (X - M)

Saving is used/absorbed into either investment spending, financing govt deficits, and building up financial claims against foreign economies

7

Explain the IS and LM curves and how they combine to generate aggregate demand curve

a

8

Explain aggregate supply curve in short run and long run

a

9

Explain causes of movements along and shifts in aggregate demand and supply curves

a

10

Describe how fluctuations in aggregate demand and aggregate supply cause short-run changes in economy and business cycle

a

11

Explain how short-run macroeconomic equilibrium may occur at a level above or below full employment

a

12

Analyze effect of combined changes in aggregate supply and demand on the economy

a

13

Describe sources, measurement, and sustainability of economic growth

a

14

Describe production function approach to analyzing sources of economic growth

a

15

Distinguish between input growth and growth of total factor productivity as components of economic growth

a

16

GDP formula

GDP = C + I + G + (X - M)