Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Comm 308 > ECON 200 > Flashcards

ECON 200 Flashcards

Final Exam (56 cards)

Start Studying
1
Q

What is GDP?

A

Gross Domestic Product. (GDP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What does GDP measure?

A

Measures the market value of finished goods and services produced within a country.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How is GDP calculated?

A

Y (GDP) = C (consumption) + I (investment) + G (government purchases) + NX (net exports)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What does the C in the calculation of GDP represent?

A

Consumptions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Will a transaction count towards GDP?

A

unofficial transactions do not count towards GDP.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Nominal GDP?

A

Nominal GDP is calculated using currency year price. (not adjusted for inflation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is real GDP?

A

Real GDP is calculated with base years. (adjusted for inflation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Does GDP really capture the wellbeing or quality of life?

A

Not directly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is CPI?

A

Consumer Price Index

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What does CPI measure?

A

A fixed basket of goods and services.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does CPI consist of?

A

Prices of all goods and services purchased for consumption by urban households.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the CPI calculation when given a basket of goods?

A

CPI in year t = CPI this year - CPI last year / CPI last year *100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the CPI calculation of inflation rate when given CPI’s?

A

Inflation rate = CPI this year - CPI last year / CPI last year *100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is hyperinflation?

A

Extremely high inflation. (always bad)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Is there a short run tradeoff between inflation and unemployment?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the unemployment rate?

A

UE Rate = Number unemployed / Number in labor force *100
(UE Rate is never 0)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the labor force product rate?

A

LFPR = Number in labor force / Number in population *100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is cyclical unemployment?

A

The deviation of unemployment from its natural rate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What types of unemployment make up the natural rate?

A

Structural and Frictional

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the natural rate of unemployment?

A

Natural Rate of UE: Frictional + Structural

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is an example of frictional unemployment?

A

Searching for a job but unemployed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is an example of structural unemployment?

A

Waiting for employment but still unemployed or the wages are too high for employment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is fiscal policy?

Study These Flashcards
A

Government spending and/or taxes

24
Q

What is expansionary fiscal policy?

Study These Flashcards
A

Increases Aggregate Demand which is typically done during recessions and increases government spending. This can lead to higher inflation.

25
Who conducts fiscal policy?
The president and congress.
26
What does it mean for the government to have a balanced budget?
When government spending = government revenue comes from taxes
27
What is monetary policy?
Interest rates/money supply, maximize employment without trying to get zero unemployment, stabilize prices, and control long-term interest rates
28
Who conducts monetary policy?
The Fed
29
What is contractionary monetary policy?
Raise interest rates or decrease money supply
30
What tools can the Federal reserve use to influence the monetary supply?
Interest rate setting and open market operations
31
What should happen to inflation when the Federal reserve increases interest rates?
Slow the economy and bring inflation down.
32
What is fractional reserve banking?
You deposit money in a bank, and then the bank uses some of your money to make a loan to someone who wants to buy a house
33
Does inflation matter over very long periods of time (in the long run)?
No
34
What is the reserve rate?
The minimum number of reserves that banks must hold (set by the Fed)
35
What measure of domestic product best captures the standard of living for the people living in a country?
Real GDP per capita
36
Inflation refers to a
Sustained increase in the prices of all goods and services
37
What is the unemployment rate if there are 135 people employed, 15 people unemployed, and 250 people living in a country?
10%
38
Unemployed workers are
Not working but actively looking for work
39
The federal reserve is responsible for
conducting monetary policy, supervising banks, and stabilizing financial markets
40
All of the following are included in GDP except
unemployment insurance
41
The CPI is sometimes thought to overstate inflation because it
is slow to include new goods, misses improvements in the quality of goods, and neglects substitution among goods when relative price changes.
42
When the Fed raises interest rates, this is an example of
contractionary monetary policy
43
The economy goes into a recession, and Betty gets laid off. It takes her a long time to find a new job because the economy is in a recession and many firms are not hiring new workers. This is an example of
cyclical unemployment
44
Suppose, Ken land has a basket of goods priced at $3 in 2018, the base year. In 2019, the same basket is priced at $5. What is the consumer price index for 2019?
166.7
45
Suppose Ken land has a CPI of 200 in year 2015 and 300 in year 2016. What is the inflation rate for 2016?
50%
46
Generally, inflation does matter in the long run?
False
47
When a government decreases spending on goods and services, its fiscal policy is
Contractionary
48
Which of the following is NOT a tool the Fed can use to influence the money supply?
Automatic stabilizers
49
The Fed increasing the money supply is an example of
Expansionary monetary policy
50
What does the I in GDP mean?
Investment
51
When taxes are equal to government spending, this results in a
balanced budget
52
Which of the following is NOT included in GDP
Direct measures of quality of life and wellbeing
53
Nominal GDP is adjusted for inflation
False
54
Real GDP is adjusted for inflation
True
55
Monetary policy in the United States is directed by Congress
False
56
What type of unemployment refers to wages being above equilibrium?
Structural

Comm 308 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions