Chapter 5 - Assignment Essays

question

Macroeconomics

answer

The study of aggregate economic activity

question

National income accounting

answer

A framework for calculating gross domestic product(GDP), which is a measure of aggregate economic output.

question

How GDP is measured

answer

Can be measured in three different ways, and in principle these three methods should all yield the same answer: Production = Expenditure = Income

question

GDP limitations

answer

Has limitations as a measure of economic activity and as a measure of economic will being.

question

Income per capita

answer

Is the income per person. This is calculated by dividing a nation's aggregate income by the number of people in the country.

question

Recessions

answer

They are periods( lasting at least two quarters) in which aggregate economic output falls.

question

Unemployed

answer

1. He or she does not have a job, 2. Has actively looked for work in the prior four weeks, 3. Is currently available for work.

question

Unemployment rate

answer

Is the fraction of the labor force that is unemployed.

question

National income accounts

answer

Measure the level of aggregate economic activity in a country.

question

National Income and Product Accounts(NIPA)

answer

The system of national income account that used by the U.S. Government

question

Gross Domestic Product, GDP

answer

Is the market value of the final goods and services produced within the borders of a country during a particular period of time.

question

Identity

answer

Two variables are related by this when the two variables are defined in a way that makes them mathematically identical.

question

Factors of Production

answer

The inputs to the production process( capital and labor or physical capital—land, factories, and machines.)

question

Value added

answer

Production-based accounting measures each firm's this, which is the firm's sales revenue minus the firm's purchases of intermediate products from other firms.

question

Consumption

answer

Is the market value of consumption goods and consumption services that are brought by domestic households.

question

Investment

answer

Is the market value of new physical capital that is brought by domestic households and domestic firms.( not bonds or stocks)

question

Government Expenditure

answer

Is the market value of government purchases of goods and services.Excludes transfer payments(social security) and excludes interest paid on government debt.

question

Exports

answer

Are the market value of all domestically produced goods and services that are purchased by households, firms, and governments in foreign countries.

question

Imports

answer

Are the market value of all foreign-produced goods and services that are sold to domestic households, domestic firms, and the domestic government.

question

National Income Accounting Identity

answer

Y=C+I+G+X-M
GDP = consumption + investment + government expenditure + exports - imports.

question

Labor income

answer

Is any form of payment that compensates people for their work.

question

Capital income

answer

Is any form of payment that derives from owning physical or financial capital.

question

What's not in GDP?

answer

1. Physical capital Depreciation, 2. Home Productiom, 3. The Underground Economy, 4. Negative Externalities,5. GNP, 6. Leisure

question

Gross National product(GNP)

answer

The market value of production generated by the factors of production—both capital and labor— possessed or owned by the residents of a particular nation.

question

Does GDP buy Happiness?

answer

GDP per capita turns out to be an excellent predictor of life satisfaction.

question

Nominal GDP

answer

Is the total value of production(final goods and services), using current market prices, to determine the value of each unit that is produced.

question

Real GDP

answer

Is the total value of production(final goods and services), using market prices from a specific base year to determine the value of each unit that is produced.

question

Real GDP growth

answer

The growth rate of real GDP.
Real GDP2013= (Real GDP2013)-(Real GDP2012)/(Real GDP2012)
(New-odd)/odd

question

GDP deflator

answer

Is 100 times the ratio of nominal GDP to real GDP is the same year. It is a measure of how prices of goods and services produced in a country have risen since the base year.

question

Consumer Price Index(CPI)

answer

Is 100 times the ration of the cost of buying a basket of consumer goods using 2013 prices divided by the cost of buying the same basket of consumer goods using base-year prices.

question

Inflation rate

answer

The rate of increase in prices. It is calculated as the year-over-year percentage increase in a price index
Inflation rate2013= (Price Index in 2013) - (Price Index in 2012)/ price index 2012

question

Adjusting nominal variables

answer

Value in 2013 = (Price index in 2013)/(Price index in 1909) x Value in 1909 dollars

1 of 32

question

Macroeconomics

answer

The study of aggregate economic activity

question

National income accounting

answer

A framework for calculating gross domestic product(GDP), which is a measure of aggregate economic output.

question

How GDP is measured

answer

Can be measured in three different ways, and in principle these three methods should all yield the same answer: Production = Expenditure = Income

question

GDP limitations

answer

Has limitations as a measure of economic activity and as a measure of economic will being.

question

Income per capita

answer

Is the income per person. This is calculated by dividing a nation's aggregate income by the number of people in the country.

question

Recessions

answer

They are periods( lasting at least two quarters) in which aggregate economic output falls.

question

Unemployed

answer

1. He or she does not have a job, 2. Has actively looked for work in the prior four weeks, 3. Is currently available for work.

question

Unemployment rate

answer

Is the fraction of the labor force that is unemployed.

question

National income accounts

answer

Measure the level of aggregate economic activity in a country.

question

National Income and Product Accounts(NIPA)

answer

The system of national income account that used by the U.S. Government

question

Gross Domestic Product, GDP

answer

Is the market value of the final goods and services produced within the borders of a country during a particular period of time.

question

Identity

answer

Two variables are related by this when the two variables are defined in a way that makes them mathematically identical.

question

Factors of Production

answer

The inputs to the production process( capital and labor or physical capital—land, factories, and machines.)

question

Value added

answer

Production-based accounting measures each firm's this, which is the firm's sales revenue minus the firm's purchases of intermediate products from other firms.

question

Consumption

answer

Is the market value of consumption goods and consumption services that are brought by domestic households.

question

Investment

answer

Is the market value of new physical capital that is brought by domestic households and domestic firms.( not bonds or stocks)

question

Government Expenditure

answer

Is the market value of government purchases of goods and services.Excludes transfer payments(social security) and excludes interest paid on government debt.

question

Exports

answer

Are the market value of all domestically produced goods and services that are purchased by households, firms, and governments in foreign countries.

question

Imports

answer

Are the market value of all foreign-produced goods and services that are sold to domestic households, domestic firms, and the domestic government.

question

National Income Accounting Identity

answer

Y=C+I+G+X-M
GDP = consumption + investment + government expenditure + exports - imports.

question

Labor income

answer

Is any form of payment that compensates people for their work.

question

Capital income

answer

Is any form of payment that derives from owning physical or financial capital.

question

What's not in GDP?

answer

1. Physical capital Depreciation, 2. Home Productiom, 3. The Underground Economy, 4. Negative Externalities,5. GNP, 6. Leisure

question

Gross National product(GNP)

answer

The market value of production generated by the factors of production—both capital and labor— possessed or owned by the residents of a particular nation.

question

Does GDP buy Happiness?

answer

GDP per capita turns out to be an excellent predictor of life satisfaction.

question

Nominal GDP

answer

Is the total value of production(final goods and services), using current market prices, to determine the value of each unit that is produced.

question

Real GDP

answer

Is the total value of production(final goods and services), using market prices from a specific base year to determine the value of each unit that is produced.

question

Real GDP growth

answer

The growth rate of real GDP.
Real GDP2013= (Real GDP2013)-(Real GDP2012)/(Real GDP2012)
(New-odd)/odd

question

GDP deflator

answer

Is 100 times the ratio of nominal GDP to real GDP is the same year. It is a measure of how prices of goods and services produced in a country have risen since the base year.

question

Consumer Price Index(CPI)

answer

Is 100 times the ration of the cost of buying a basket of consumer goods using 2013 prices divided by the cost of buying the same basket of consumer goods using base-year prices.

question

Inflation rate

answer

The rate of increase in prices. It is calculated as the year-over-year percentage increase in a price index
Inflation rate2013= (Price Index in 2013) - (Price Index in 2012)/ price index 2012

question

Adjusting nominal variables

answer

Value in 2013 = (Price index in 2013)/(Price index in 1909) x Value in 1909 dollars

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