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Flashcards in Economic Measures.Indicators Deck (29):
1

What are two methods to measuring GDP?

Expenditure and income approach

2

What are the 4 components of GDP in expenditure approach?

Government spending, Investments, Personal Consumption, and Net exports(exports - imports)

3

What are the components of GDP in income approach?

Income of proprietors, Profits of corporations, Interest(net), Rental income, Adjustments misc. items, Taxes, Employee compensation, and Depreciation

4

Calculation for Net Domestic Product(NDP)

GDP - Depreciation

5

What is the market value of final goods & services produced by residents of a country?

Gross National Product(GNP)

6

Calculation for Disposable Income(DI)

Personal income - personal taxes

7

Calculation for unemployment rate

(# of unemployed(seeking)) / Total labor force(seeking+employed)) x 100

8

What type of unemployment results from workers routinely changing jobs or from workers being temporarily laid off?

Frictional unemployment

9

What type of unemployment occurs when change in technology or doesn't correspond with skills?

Structural Unemployment

10

What type of unemployment results from declines in real GDP?

Cyclical unemployment

11

What is the employment rate that exists when the economy is at its potential output level?

Natural rate of unemployment

12

What type of employment involves no cyclical unemployment?

Full employment

13

What is a sustained decrease in the general prices of goods?

Deflation

14

What is the change in price levels over time?

Consumer Price Index

15

Calculation of inflation rate

Change in CPI / CPI(last period)

16

What are the causes of inflation & deflation?

Shifts in the AD or AS curves

17

What are the factors of demand-pull inflation factors?

Increases in government spending, wealth, money supply, and decreases in taxes

18

What are the factors of cost-push inflation factors?

Increase in oil prices and nominal wages

19

What type of assets & liabilities are inversely related to price levels?

Monetary Assets & Liabilities

20

What type of assets & liabilities are directly related to price levels?

Non-monetary assets & liabilities

21

What type of curve illustrates trade-off between inflation & unemployment?

Phillips curve

22

What happens in a budget deficit?

Country spends more than it takes in; Spend more, tax less to stimulate demand

23

What happens in a budget surplus?

Country spend less, tax more to reduce demand

24

Calculation for Nominal Interest rate

Real RF(pure time value of money) + Expected inflation rate

25

What is real interest rate?

Supply/demand for loanable funds "money supply"

26

Does nominal interest rates and inflation move together?

Yes

27

What is done in an expansionary phase?

Increase in money supply, Fed purchases government securities

28

What is done in a restrictive phase?

Decrease in money supply, Fed sells government securities

29

Is demand for money inversely or directly related to interest rates?

Inversely