econ Flashcards by A T

factor payment

how GDP is measured

land-rent
labor-wage
capital-interest
entrpreneurship-profit

How well did you know this?

Not at all

Perfectly

per capita GDP

GDP/population

How well did you know this?

Not at all

Perfectly

GDP

measured anything that is made in the country per year

How well did you know this?

Not at all

Perfectly

recession

when GDP goes down for 6 months

How well did you know this?

Not at all

Perfectly

intermediate goods

raw materials needed to make something. doesn’t count as GDp bc double counting

How well did you know this?

Not at all

Perfectly

excluded from GDP

foreign stuff
any work you do for yourself
barter
housework
cash
transfer payment-money from gov
stock/bonds
used
crime/pollution

How well did you know this?

Not at all

Perfectly

income method way of computing GDP

wages+
interest+
rent+
profit

How well did you know this?

Not at all

Perfectly

expenditure method way of computing GDP

Consumer spending+
investment-business spending+
gov spending(most volitole)+
net export

*includes housing

How well did you know this?

Not at all

Perfectly

unplanned investment

made but not sold at the end of the year, in GDP but is bad

How well did you know this?

Not at all

Perfectly

business cycle

expansion/recovery
peak-inflation
contraction/recession
trough/depression

How well did you know this?

Not at all

Perfectly

demandpull inflation

consumer buy product faster than it can be produced, price rises
peak of business cycle

How well did you know this?

Not at all

Perfectly

fiscal policy

uses taxes n gov spending to alter economy

How well did you know this?

Not at all

Perfectly

monetary policy

uses supply of money to change interest rates, by federal reserve

How well did you know this?

Not at all

Perfectly

gdp-depreciation

net domestic product

depreciation: new thing that replaces old

How well did you know this?

Not at all

Perfectly

personal income-personal taxes

disposable income

How well did you know this?

Not at all

Perfectly

disposable income-expenses

discretionary income

How well did you know this?

Not at all

Perfectly

frictional unemploy

btw transtion in life

How well did you know this?

Not at all

Perfectly

cyclical unemploy

during contraction of business ccle, slowdown, laidoff

structural unemploy

skills obselete

technical unemploy

job replaced by machine

discouraged worker-not counted as unemployed

unemployed stop looking
or
unemployed for 2 years

unemployment rate

unemployed/

labor force

unemployed+employed+looking

good percentage

unemploy 4-6
GDP 3
inflation 2

labor force participation rate

labor force/ | population

misery index

inflation+unemployment

cost-push inflation 70

cost of production increases prices increases high unemployment

hyperinflation

>_ 50 percent inflation overprinting money

qunatity theory of money

increase money supply leads to increase in price level

menu cost | how inflationcreates distortions in the econ n impact ppl

business spends time, effort and money to change prices

shoe leather cost

consumers running around and buying things before prices go up

impacted most by inflation

consumers-prices rising faster than income fixed income-retired sss savers banks with fixed rate loans-paying back during flation with less valuable money

winners of inflation

investors in gold/real estate gov in debt paying back loans on fixed dollar contract

leading indicators of future econ

changes in 6-9 months - avg work week, decreases=unemployed - building permits, increases=unemployed - stock market, increases=good - inventory

3 measures of inclation

consumer price index-CPI (popular) GDP deflator producer price index

CPI

uses fixed weighted market basket of goods/services that consumer purchase regularly most heavily weighed=housing/mortage changes from year to year is infaltion rate

weakness in CPI

subsitution bias uses only retail prices quality changes, increase in quality, increases price intro of new products

GDP deflator percentage

measures good.services actually produced based on GDP nominal GDP/real GDP = inflation rate similar to CPI

Producer price index

measures good purchases by business. increases=foreshadows increases in toher measures of inflation. raw materials included

classical economy theorest

economy is flexible, will go back to ful employ, gov stays out of it

keynesian

econ is rigid, needs intervention

why Aggregate demand curve slopes down

real balnces wealh effect interest rate effect foreign purchases effect

why AD curve shift

stock market boom increase consumer spending-increases AD changes in CIGX