Chapter 20 Flashcards

1
Q

Why do we care

A

Quality of life. Compare/ measure across countries and time. (Put a number on your quality of life)

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2
Q

4 parts of GDP

A

Market value
Final goods and services
Within a country
Given period of time

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3
Q

How do we count

A

Expenditure

Income

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4
Q

4 parts of expenditure

A

Consumer
Firms
Government
Rest of world (import. Export)

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5
Q

4 factors of production

A

Labour-wages
Capital-interest
Land-rent
Entrepreneurship-profit

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6
Q

GDP=

A

Y (wages + interest + rent + profit)=C+I+G+(X-M)

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7
Q

Nominal GDP?

A

Reflects price changes as well as quantity changes over time

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8
Q

Steps for chained GDP

A
Chose one base year
Calculate real GDP in each year using that base year
Calculate growth rate
Chose other base year repeat 2,3
Average of two growth rates
Build chain
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9
Q

Limitations to real GDP

A
Leisure time
Natural resource use
Population growth (per capita)
Household production 
Rule of laws
Illegal goods
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