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1
Q

Gross Domestic Product (GDP)

A

the market value of all the final goods and services produced within a country in a given time period (one year)

2
Q

market value

A

prices in which items are traded in markets (value= market price x quantity)

3
Q

market prices

A

the price of each item

4
Q

final good or service

A

a good or service that is produced for its final user and not as a component of another good service

5
Q

intermediate good or service

A

a good or service that is used as a component of a final good or service

6
Q

the same good can be either intermediate or final depending on how it is ____

A

used

7
Q

the value of goods and services for their own use is an example of…

A

exclusions in GDP

8
Q

market value of homes is equal to…

A

the rental value

9
Q

the production of goods and services outside of the the US is an example of…

A

exclusions in GDP

10
Q

given time periods of GDP

A

quarterly GDP (3 months) or annually GDP (12 months)

11
Q

What GDP does the Federal Reserve use?

A

quarterly GDP (short term)

12
Q

What GDP do economists use?

A

annual GDP (longterm)

13
Q

four groups that buy the final goods and services

A

households, firms, governments (local & federal), rest of world

14
Q

consumption expenditure

A

household

15
Q

investments

A

firms

16
Q

government expenditures goods and services

A

governments

17
Q

net exports and goods

A

rest of world

18
Q

nondurable goods + durable goods + rental value + services =?

A

consumption expenditure

19
Q

nondurable goods

A

pizza, oranges, food, anything that can go bad, etc

20
Q

durable goods

A

laptop, TV, etc.

21
Q

services

A

rock concert, haircut, Xbox subscription, etc.

22
Q

the purchase of new capital goods and additions in inventory

A

investment (included in GDP)

23
Q

the purchase of stocks and bonds are…

A

NOT equal to stocks and bonds

24
Q

federal (US Defense Department) + state (State Department) +local (Town Hall) =

A

government expenditures goods and services

25
Q

Items that firms in the US produce and sell to the rest of the world

A

Exports of good and services

26
Q

Items that households, firms, and governments in the US buy from the rest of the world

A

Imports of goods and services

27
Q

value of exports goods and services - value of imports goods and services=?

A

net export

28
Q

if exports ______ imports, then the net exports are positive and US produces goods and services ________

A

exceed;increase

29
Q

if imports ______ exports, then the net exports are negative and US produces goods and services _________

A

exceed;decrease

30
Q

exports > imports =

A

positive net exports and increase in GAS (goods and services)

31
Q

imports > exports =

A

negative net exports and decrease in GAS (goods and services)

32
Q

C+I+G+NX=

A

total expenditure

33
Q

labor earns….

A

wages

34
Q

capital earns…

A

interest

35
Q

land earns…

A

rent

36
Q

entrepreneurship earns…

A

profit

37
Q

undistributed profit

A

combination of interest and profits that firms retain and do not pay to households

38
Q

the expenditure approach

A

the measurement of the GDP using data on consumption expenditure, investment, government expenditure on GAS, and net exports

39
Q

the income approach

A

Measures GDP by summing the incomes that firms pay households for the factors of production they hire

40
Q

net product

A

what the income approach measures

41
Q

deprecation

A

the decrease in the value of capital that results from its use and from obsolescence

42
Q

Disposable personal income

A

the income received by households minus personal income taxes paid

43
Q

the value of the final goods and services produced in a given year expressed in the prices of the base year

A

Real GDP

44
Q

the value of the final goods and services produced in a given year expressed in the prices of that same year (economy’s output in current dollars)

A

Nominal GDP

45
Q

factor services

A

factor of production (e.g: labor)

46
Q

transfer payments

A

payments that the government makes to individuals without expecting GAS in return (e.g: social security, scholarships grants)

47
Q

used/second hand products are…

A

not included in the GDP

48
Q

purely financial transactions (e.g: transfer payments) are…

A

not included in the GDP

49
Q

the sale of stocks and bonds are…

A

not included in the GDP (no production of GAS)

50
Q

services provided for no money (childcare provided by stay-at-home parent) are…

A

not included in the GDP

51
Q

intermediate GAS is…

A

not included in the GDP

52
Q

foreign produced GAS are…

A

not included in the GDP

53
Q

rent is a _______ for a service and is included in the GDP

A

payment

54
Q

the value of inventories are…

A

not included in the GDP

55
Q

aggregate output

A

the sum of all goods produced over a certain period of time

56
Q

aggregate spending

A

the sum of all the expenditures undertaken in the economy by the factors during a specific time period

57
Q

GDP does not equal…

A

prosperity or higher standards of living

58
Q

GDP measures ________________, but does not include ______________________ that may contribute to happiness and quality of life

A

aggregate output;nonmarket transactions

59
Q

standard of living

A

the level of consumption of goods and services that people enjoy, on average

60
Q

real GDP/population =?

A

real GDP per person

61
Q

potential GDP

A

the value of real GDP when all the economy’s factors of production (land, labor, capital, entrepreneurial ability) are fully employed

62
Q

when the factors of production are ________, real GDP is below potential GDP

A

unemployed

63
Q

when the factors of production are _____________, real GDP exceeds potential GDP

A

over-employed

64
Q

a periodic but irregular up-and-down movement of total production and other measures of economic activity

A

business cycle

65
Q

each business cycle has an _________ and _________

A

expansion;recession

66
Q

each business cycle has two turning points: ____ and ______

A

peak;trough

67
Q

a period during which real GDP increases

A

expansion

68
Q

a period during which real GDP decreases for at least two successive quarters (with a negative growth rate)

A

recession

69
Q

a period during which real GDP decreases for at least two successive quarters (with a negative growth rate)

A

recession

70
Q

people who are currently holding a job, either part-time or full-time

A

employed

71
Q

people who are not currently employed but are actively looking for work

A

unemployed

72
Q

employed + unemployed =

A

labor force

73
Q

labor force/population 16 years and older x 100 =?

A

labor force participation rate

74
Q

prisoners, military personnel, discouraged workers, marginally attached workers, or people in mental institutions are…

A

not counted in the labor force participation rate

75
Q

number of unemployed workers/labor force x 100 =?

A

unemployment rate

76
Q

an economy’s performance can be measured by different indicators such as the __________ rate

A

unemployment

77
Q

non working people who are capable of working but have given up looking for a job due to the state of the job market

A

discouraged workers

78
Q

those who would like to be employed and have looked for a job in the recent past but are not currently looking for work are…

A

marginally attached workers

79
Q

part-timers because they cannot find full-time jobs

A

underemployed workers (still employed)

80
Q

unemployment due to the time workers spend in job search

A

frictional unemplyment

81
Q

new graduates looking for a job that is the best fit for them is an example of __________ unemployment

A

frictional

82
Q

skilled people looking for a new job opportunity is an example of __________ unemployment

A

frictional

83
Q

when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate

A

structural unemployment

84
Q

when workers’ skills are obsolete or no longer needed

A

structural unemployment

85
Q

workers who are replaced by a robot is an example of __________ unemployment

A

structural

86
Q

a job that moved to a lower wage area is an example of __________ unemployment

A

structural

87
Q

unemployment that follows the business cycle and occurs during recessions, but the jobs usually return after the economy recovers

A

cyclical unemployment

88
Q

when aggregate demand declines, or consumers are buying less and people are getting laid off are an example of…

A

cyclical unemployment

89
Q

frictional unemployment + structural unemployment =?

A

natural rate of unemployment

90
Q

natural rate of unemployment + cyclical unemployment =

A

actual rate of unemployment

91
Q

a measure of the average change over time in the prices paid by consumers for a FIXED “market basket” of goods and services

A

consumer price index (CPI)

92
Q

consumption goods

A

market basket

93
Q

a way to evaluate the purchasing power of an average American family is…

A

consumer price index (CPI)

94
Q

an overall decrease in prices that strengthens the purchasing power of a given income

A

deflation

95
Q

an overall increase in prices which erodes the purchasing power of a given income

A

inflation

96
Q

when the CPI rises, _________ is occuring

A

inflation

97
Q

when the CPI falls, _________ is occuring

A

deflation

98
Q

market basket in current year/market basket in base year x 100 =?

A

consumer price index (CPI)

99
Q

new CPI - old CPI/ old CPI x 100 =?

A

inflation rate

100
Q

the term economists use when referring to variables that have not been adjusted for inflation

A

nominal

101
Q

the amount of money one earns in the form of wages or salary is…

A

nominal income

102
Q

the stated interest rate is the…

A

nominal interest rate

103
Q

the term used to describe variable that HAVE been adjusted for inflation

A

real

104
Q

the purchasing power of a given wage or salary is…

A

real income

105
Q

the value of an economy’s output in inflation-adjusted dollars

A

real GDP

106
Q

the inflation-adjusted cost of borrowed money is…

A

real interest rate

107
Q

nominal value/price index/ 100 =?

A

real value

108
Q

a slowdown in the rate of increase in the consumer price index (CPI)

A

disinflation

109
Q

beneficiaries of unanticipated inflation are anyone ______ money at a fixed amount (e.g: borrowers)

A

payers

110
Q

losers of unanticipated inflation are anyone _________ money at a fixed amount (e.g: lenders)

A

receiving

111
Q

people with variable interest rates are _________ from unanticipated inflation

A

protected

112
Q

people with fixed interest rates are ___________ from unanticipated inflation

A

unprotected

113
Q

the condition that exists when expected inflation is equal to actual inflation

A

price stability

114
Q

pl x y =?

A

nominal GDP

115
Q

an average of the current prices of all the goods and services included in GDP expressed as a percentage of base-year prices

A

GDP deflator (price index)

116
Q

real GDP x aggregate PL/100 =?

A

nominal GDP

117
Q

nominal GDP/ aggregate PL/100 =?

A

real GDP