Flashcards in BEC 5 - Macroeconomics 1 - Gross Measures Deck (16):
Identify the five major sectors (or elements) of a macroeconomic free-market flow model.
In a macroeconomic free-market flow model, what are "leakages?"
Leakages are the purposes for which individual income is used other than for domestic consumption expenditures. These leakages include amounts of income that go for taxes, savings and payments for imports.
In a macroeconomic free-market flow model, what are "injections?"
Injections are the sources of amounts added to domestic production that are do not result from domestic consumption expenditures. These injections include amounts that come from government spending and subsidies, investment spending and amounts received for exports.
Define "nominal gross domestic product (nominal GDP)".
Total output of final goods and services produced for exchange in the domestic market during a period (usually a year), without adjustment for changing price levels.
Define "real gross domestic product (real GDP)".
Total output of final goods and services produced for exchange in the domestic market during a period (usually a year), measured at constant prices.
Define "potential gross domestic product (potential GDP)".
The maximum final output that can occur in the domestic economy at a point in time, without creating upward pressure on the general level of prices in the economy.
Define "net national product (NNP)".
Total output of all goods and services produced worldwide using economic resources of U.S. entities, but only including the cost of investment in new capital (excludes depreciation).
Define "gross national product (GNP)".
Total output of all goods and services produced world-wide using economic resources of U.S. entities.
Define "national income (NI)".
The total payments for economic resources included in all production (but not including taxes as a payment).
Identify important gross measures used in macroeconomics.
Measures of total activity or output in an economy including: 1.Nominal Gross Domestic Product (GDP);
2.Real Gross Domestic Product;
3.Potential Gross Domestic Product;
4.Gross National Product (GNP);
5.Net National Product;
7.Personal Disposable Income.
Define "official full employment".
Officially, full employment exists where there is no cyclical unemployment. When there is official full employment, there could still be frictional, structural and/or seasonal unemployment.
Define "frictional unemployment".
Unemployment in which members of the labor force are not employed because they are in transition between jobs or have imperfect information about job opportunities.
Define "cyclical unemployment".
Unemployment in which members of the labor force are not employed because a downturn in the business cycle has reduced the current need for workers.
Identify characteristics that exclude individuals from the labor (or work) force.
The following are not included in the labor force: 1.Those less than 16 years old;
3.Those not actively seeking work;
4.Those who are institutionalized;
5.Military members on active duty.
Define "structural unemployment".
Unemployment in which members of the labor force are not employed because their prior types of jobs have been greatly reduced or eliminated, and/or because they lack the skills needed for available jobs.