question
What is GDP?
answer
the market value of all final goods and services produced within a country in a given period of time
question
What are demand-side components?
answer
consumer,business,trade balance, and government
question
How is economic growth measured?
answer
real GDP per capita
question
What is GNP?
answer
Gross National Product—total value of goods and services produced by a country in 1 year
question
What are the components of economic growth
answer
technology, human, and physical capital
question
What are the stages of a business cycle?
answer
recession, trough, expansion, peak
question
What is the difference between real and nominal values?
answer
Nominal values are the values that the prices are operating at the time whereas real values have been adjusted for inflation, and are usually lower.
question
How do you calculate the real interest rate?
answer
nominal interest rate - inflation rate
question
What is the value of a price index in the base year?
answer
100
question
what are the types of unemployment?
answer
cyclical-business cycle
frictional- more jobs
structure- replaced by tech
frictional- more jobs
structure- replaced by tech
question
what individuals are included and excluded from the labor force/unemployment
answer
excluded- full-time students under 16, retired/ discouraged workers, anyone not looking for a job
included- looking for a job
included- looking for a job
question
labor force
answer
employed + unemployed
question
What is full employment?
answer
when the only unemployment is natural unemployment
question
What is a trade deficit?
answer
when a country imports more than it exports
question
What is a trade surplus?
answer
when a country exports more than it imports
question
what is the difference between the CPI and GDP deflator?
answer
CPI- base year quantities
GDP deflator-Fixed base year quantities
GDP deflator-Fixed base year quantities
question
what is the most common price index?
answer
Consumer Price Index (CPI)
question
What is a core inflation index?
answer
excludes gas and electricity
question
What is appreciation?
answer
an increase in a currency's value
question
what is the effect of inflation on the exchange rate?
answer
depreciates currency
question
What are the different types of exchange rates
answer
Floating-controlled by market
Pegged- set by central
Pegged- set by central
question
What is PPP (Purchasing Power Parity)?
answer
PPP (Purchasing Power Parity) is the number used by the World Bank. It measures value of a country's money in relation to what can be purchased with that amount.
question
who benefits from protectionism?
answer
domestic producers
question
What is comparative advantage?
answer
the ability to produce a good at a lower opportunity cost than another producer
question
What is an absolute advantage
answer
The ability to produce more of a product with the same resources as your competitor. This is called an absolute advantage because you are just simply overall more productive.
question
What is a tariff?
answer
A tax on imported goods
question
What is an embargo
answer
A ban on trade
question
What is a quota
answer
A limit on the number of goods that can be imported
question
What happens to inflation and unemployment during a recession?
answer
inflation decreases and unemployment goes up
question
Calculate unemployment rate
answer
unemployed/(employed+ unemployed) x100
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