Eco 102 Ch 6, 8, 9 & 11 - Assignment Essays

question

gross domestic product (GDP)

answer

the value of all final goods and services produced within a country in a given year.

question

Gross National Product (GNP)

answer

where the profits flow~adds what domestic businesses and labor abroad produces and subtracts any payments that foreign labor/businesses located in the United States

question

Give me an example of GNP

answer

Ex: Apple products are U.S machinery, but it's made in China. This is apart of China's GNP.

Ex: Toyota's are Japanese machinery, but it's made in Louisiana. This is apart of Louisiana's GNP.

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Nominal Value

answer

Any statistic measure in terms of actual prices that exist at the time. (current year price and current year quantity.)

question

Real Value

answer

Refers to the same statistic after it has been adjusted for inflation

question

Trade balance

answer

the gap between imports and exports. The U.S has a trade deficit because we purchase more abroad relatively then foreigners purchase from us.

question

Transfer payments

answer

A payment made or income received in which no goods or services are being paid for, such as a benefit payment or subsidy.

question

Ceteris Paribus

answer

a Latin phrase that means "all other things held constant"

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The expenditure approach to calculating GDP

answer

GDP= C+I+G+Xn

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Natural Rate of Unemployment (NRU)

answer

The full-employment rate of unemployment; the unemployment rate occurring when there is no cyclical unemployment and the economy is achieving its potential output; the unemployment rate at which actual inflation equals expected inflation.

4-5%

question

answer

Personal Consumption Expenditures: spending by households on goods and services.

Ex: goods are durable and non-durable such as cars

question

answer

Gross Private Domestic Investment: spending by business on newly created capital goods. Changes in inventories and construction.

Ex: Military supplies/Schools

question

answer

Government Consumption Expenditures: spending by any level of government on goods and services.

Ex: houses burning down

question

answer

Net exports: (exports-imports)

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Base Year

answer

year serving as point of comparison for other years in a price index or other statistical measure. It is randomly chosen has 100 in the row.

question

Double counting

answer

counting a good more than once when computing GDP

question

Intermediate goods

answer

Are goods that go into producing other goods, from GDP calculations.

Ex: wool/sole of shoes thread

question

What would make GDP larger?

answer

If use goods and illegal goods were counted in GDP.

question

Real GDP is calculated how?

answer

Nominal GDP divided by Price Index multiplied by 100.

question

Recession

answer

When the economy is contracting.

question

Exchange Rate

answer

The measure of one's currency in terms of another currency.

1 US dollar is 0.88 EUROS
1 UK pound (cursive L) is 1.33 US dollars
19.19 pesos is 1 US dollar

question

Per capita

answer

means per person

question

standard of living

answer

Quality of life based on ownership of necessities and luxuries that make life easier.

question

Inflation formula (CPI)

answer

percentage change= New minus old, divided by old, multiply 100

price over time, change in price level

plug in index #

question

substition bias

answer

the rise in price of a fixed basket of goods over times (tend to overstate the rise in consumer's true cost of living.)

question

quality/new goods bias

answer

rise in price of fixed basket of goods over time tends to overstate the rise in a consumer's true cost of living, because it does not take into account how improvements in the quality of existing goods or the invention of new goods improves the standard of living

question

core inflation index

answer

taking the CPI and excluding volatile economic variables

question

Producer Price Index (PPI)

answer

based on prices paid for supplies and inputs by producers of goods and services

question

Deflation

answer

Negative inflation or general decrease in price level (buying power of money increases/can slow the economy down)

question

hyperinflation

answer

an outburst of high inflation

question

CPI (Consumer Price Index)

answer

a measure of the overall cost of the goods and services bought by a typical consumer

question

Say's Law

answer

supply creates its own demand

question

Keynes' Law

answer

demand creates its own supply

question

Neoclassical economist

answer

believed the supply determine the size of the macro economy

question

Recessionary Gap

answer

intersecting between SRAS and AD when its less than LRAS

question

What will shift the AD curve?

answer

change in personal consumption expenditures.
change in gross product domestic investment.
change in government consumption expenditures.
change in net exports.

aka

C+I+G+N

question

What will shift the SRAS curve?

answer

change in the cost of production. (input prices)
change in labor productivity.
a recession.

question

How would a Keynesian economist "solve" a recessionary gap?

answer

increase government consumption expenditures.
cut taxes fore households.

question

What a recessionary graph looks like?

answer

Its to the left of LRAS line, unemployment rate is higher than it should be, productivity is low

question

What macroeconomic goals do we have for our economy in the United States?

answer

Economic growth, low unemployment, low inflation (stable prices)

question

A home that was built in the USA last year, but did not sell until this year, is included on the United States' GDP for this year.

answer

False

question

If a U.S. consumer buys maple syrup made in Canada, it is included on Canada's GDP

answer

True

question

If a U.S. consumer buys maple syrup made in Canada, it is included on the United States' GDP.

answer

False

question

If a U.S. consumer mows their own lawn, the effort of mowing the lawn is included on the United States' GDP.

answer

False

question

If a babysitter in the U.S. gets paid cash "under the table", it is included on the United States' GDP.

answer

False

question

The dollar amount of the bridge that was built in the U.S. and paid for by the federal government this year is included the United States' GDP.

answer

True

question

Transfer payments are included in Government consumption expenditures.

answer

False

question

For calculating GDP in macroeconomics, the term investment is referring to:

answer

Purchase of new capital goods, all real estates (factories, office buildings, residential housing) & changes in inventories

question

Transfer payments

answer

are not included in GDP.
do not represent production.
include the government's redistribution of income through government social programs and subsidies to business

All of the above is the correct answer

question

The nation of Smilestan has export sales of $20 billion, government consumption expenditures of $1,000 billion, business investment is $50 billion, imports are $40 billion, and consumption spending is $2,000 billion. The dollar value of GDP is:

answer

$3,030 billion

question

_______________is the price index that measures the average prices of all goods and services produced within an economy.

answer

GDP Deflator

question

At the end of 2009, the exchange rate was £.617 (British pounds) = $1 US and the United Kingdom's Real GDP was £1,461,361 million. Convert the GDP of the United Kingdom into US dollars for 2009.

answer

= $2,368,494.3 million

question

A flaw in the measurement of GDP is...

answer

GDP does not cover leisure time
GDP does not measure the health of the environment or the population.
GDP does not offer equal access to goods and services.
GDP does not consider production which is not exchanged in a market.

All of the above is the answer

question

The unemployment rate measures:

answer

unemployed workers as a percentage of the labor force.

question

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force.

answer

25%

question

If the number of employed persons in a country equals 55 million, the number of unemployed persons equals 11 million, and the number of persons over age 16 in the population equals 70 million, the unemployment rate roughly equals:

answer

17%

question

Frictional unemployment is:

answer

unemployment that is due to normal turnover in the labor market.

question

The type of unemployment that occurs because of a recession is called:

answer

cyclical unemployment

question

The most significant real economic cost of high unemployment to the macro economy is:

answer

...

question

structural unemployment

answer

unemployment that occurs when workers' skills do not match the jobs that are available

question

OMO's are always from the Federal Reserve's point of view. An open market purchase means that the Fed bought US government securities (aka bonds or t-bills) from a private commercial bank... now the private bank has fewer US bonds and more cash. When the Fed bought the bond, the Fed paid the private bank cash.

answer

OMO's are always from the Federal Reserve's point of view. An open market Sale means that the Fed sells US government securities (aka bonds or t-bills) to a private commercial bank... now the private bank has less cash and more US bonds. When the Fed sold the bonds, they gave the private bank the bond and took cash from the bank.

1 of 61

question

gross domestic product (GDP)

answer

the value of all final goods and services produced within a country in a given year.

question

Gross National Product (GNP)

answer

where the profits flow~adds what domestic businesses and labor abroad produces and subtracts any payments that foreign labor/businesses located in the United States

question

Give me an example of GNP

answer

Ex: Apple products are U.S machinery, but it's made in China. This is apart of China's GNP.

Ex: Toyota's are Japanese machinery, but it's made in Louisiana. This is apart of Louisiana's GNP.

question

Nominal Value

answer

Any statistic measure in terms of actual prices that exist at the time. (current year price and current year quantity.)

question

Real Value

answer

Refers to the same statistic after it has been adjusted for inflation

question

Trade balance

answer

the gap between imports and exports. The U.S has a trade deficit because we purchase more abroad relatively then foreigners purchase from us.

question

Transfer payments

answer

A payment made or income received in which no goods or services are being paid for, such as a benefit payment or subsidy.

question

Ceteris Paribus

answer

a Latin phrase that means "all other things held constant"

question

The expenditure approach to calculating GDP

answer

GDP= C+I+G+Xn

question

Natural Rate of Unemployment (NRU)

answer

question

answer

Personal Consumption Expenditures: spending by households on goods and services.

Ex: goods are durable and non-durable such as cars

question

answer

Gross Private Domestic Investment: spending by business on newly created capital goods. Changes in inventories and construction.

Ex: Military supplies/Schools

question

answer

Government Consumption Expenditures: spending by any level of government on goods and services.

Ex: houses burning down

question

answer

Net exports: (exports-imports)

question

Base Year

answer

year serving as point of comparison for other years in a price index or other statistical measure. It is randomly chosen has 100 in the row.

question

Double counting

answer

counting a good more than once when computing GDP

question

Intermediate goods

answer

Are goods that go into producing other goods, from GDP calculations.

Ex: wool/sole of shoes thread

question

What would make GDP larger?

answer

If use goods and illegal goods were counted in GDP.

question

Real GDP is calculated how?

answer

Nominal GDP divided by Price Index multiplied by 100.

question

Recession

answer

When the economy is contracting.

question

Exchange Rate

answer

The measure of one's currency in terms of another currency.

1 US dollar is 0.88 EUROS
1 UK pound (cursive L) is 1.33 US dollars
19.19 pesos is 1 US dollar

question

Per capita

answer

means per person

question

standard of living

answer

Quality of life based on ownership of necessities and luxuries that make life easier.

question

Inflation formula (CPI)

answer

percentage change= New minus old, divided by old, multiply 100

price over time, change in price level

plug in index #

question

substition bias

answer

the rise in price of a fixed basket of goods over times (tend to overstate the rise in consumer's true cost of living.)

question

quality/new goods bias

answer

question

core inflation index

answer

taking the CPI and excluding volatile economic variables

question

Producer Price Index (PPI)

answer

based on prices paid for supplies and inputs by producers of goods and services

question

Deflation

answer

Negative inflation or general decrease in price level (buying power of money increases/can slow the economy down)

question

hyperinflation

answer

an outburst of high inflation

question

CPI (Consumer Price Index)

answer

a measure of the overall cost of the goods and services bought by a typical consumer

question

Say's Law

answer

supply creates its own demand

question

Keynes' Law

answer

demand creates its own supply

question

Neoclassical economist

answer

believed the supply determine the size of the macro economy

question

Recessionary Gap

answer

intersecting between SRAS and AD when its less than LRAS

question

What will shift the AD curve?

answer

change in personal consumption expenditures.
change in gross product domestic investment.
change in government consumption expenditures.
change in net exports.

aka

C+I+G+N

question

What will shift the SRAS curve?

answer

change in the cost of production. (input prices)
change in labor productivity.
a recession.

question

How would a Keynesian economist "solve" a recessionary gap?

answer

increase government consumption expenditures.
cut taxes fore households.

question

What a recessionary graph looks like?

answer

Its to the left of LRAS line, unemployment rate is higher than it should be, productivity is low

question

What macroeconomic goals do we have for our economy in the United States?

answer

Economic growth, low unemployment, low inflation (stable prices)

question

A home that was built in the USA last year, but did not sell until this year, is included on the United States' GDP for this year.

answer

False

question

If a U.S. consumer buys maple syrup made in Canada, it is included on Canada's GDP

answer

True

question

If a U.S. consumer buys maple syrup made in Canada, it is included on the United States' GDP.

answer

False

question

If a U.S. consumer mows their own lawn, the effort of mowing the lawn is included on the United States' GDP.

answer

False

question

If a babysitter in the U.S. gets paid cash "under the table", it is included on the United States' GDP.

answer

False

question

The dollar amount of the bridge that was built in the U.S. and paid for by the federal government this year is included the United States' GDP.

answer

True

question

Transfer payments are included in Government consumption expenditures.

answer

False

question

For calculating GDP in macroeconomics, the term investment is referring to:

answer

Purchase of new capital goods, all real estates (factories, office buildings, residential housing) & changes in inventories

question

Transfer payments

answer

question

answer

$3,030 billion

question

_______________is the price index that measures the average prices of all goods and services produced within an economy.

answer

GDP Deflator

question

At the end of 2009, the exchange rate was £.617 (British pounds) = $1 US and the United Kingdom's Real GDP was £1,461,361 million. Convert the GDP of the United Kingdom into US dollars for 2009.

answer

= $2,368,494.3 million

question

A flaw in the measurement of GDP is...

answer

question

The unemployment rate measures:

answer

unemployed workers as a percentage of the labor force.

question

During the Great Depression of the 1930s, the unemployment rate reached more than _________ of the labor force.

answer

25%

question

answer

17%

question

Frictional unemployment is:

answer

unemployment that is due to normal turnover in the labor market.

question

The type of unemployment that occurs because of a recession is called:

answer

cyclical unemployment

question

The most significant real economic cost of high unemployment to the macro economy is:

answer

...

question

structural unemployment

answer

unemployment that occurs when workers' skills do not match the jobs that are available

question

answer

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