question
Real wages
answer
The nominal wage adjusted for the effects of inflation
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
C I G NX?
answer
Consumer spending, investment spending, government purchases, and net exports
question
What is consumption (C)?
answer
total spending by households on final goods & services
question
Examples of consumption (C)
answer
durable goods like appliances, cars, furniture, toys. services. and nondurable goods
question
What is government purchases (G)? What is the formula?
answer
all spending on the goods & services by local, state, and federal governments. G+TR
question
What are examples of government purchases (G)?
answer
Government transfer payments like social security benefits, unemployment insurance benefits paid to the public
question
What is net exports (NX)?
answer
The gap between the imports and exports is also called trade balance
question
Exports > imports
answer
trade surplus 🙂
question
Imports > exports
answer
Trade deficit 🙁
question
Normally _________ is the largest part of all GDP components
answer
Consumption (C)
question
In the circular flow diagram, households ...
answer
households are sellers in the markets for the factors of production
question
Spending on financial assets ________ counted as part of GDP ________.
answer
are not; because they are not counted as goods or services
question
The consumer price index is used to...
answer
monitor changes in the cost of living over time
question
Which agency calculates CPI?
answer
Bureau of Labor Statistics
question
In calculating cpi, the quantities of the goods and services in the fixed basket are determined by...
answer
surveying consumers
question
An important difference between the GDP deflator and the consumer price index is that_____.
answer
the GDP deflator reflects the prices of all final goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers
question
A nation's standard of living is best measured by its_____.
answer
real GDP per person
question
If one wants to know how the standard of living has changed over time in a given country, one should look at the growth rate of ...
answer
Growth rate of real GDP per capita
question
The level of real GDP person_____.
answer
is very similar across countries, but the growth rate of real GDP per person differs widely across countries
level=similar
real=different
level=similar
real=different
question
Productivity may be measured by...
answer
the growth rate of real GDP per person
question
What is the correct way to measure labor productivity?
answer
The quantity of output divided by the number of hours worked.
question
Consider an economy, where the aggregate real output is growing faster than the total population, then___.
answer
the standard of living is rising
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