Econ chapter 12-13 - Assignment Essays

question

gross domestic product:

answer

the dollar value of all final goods and services produced within a country’s borders in a given year

tracks the exchanges of money

question

intermediate goods:

answer

products used in the production of final goods

question

durable goods:

answer

goods that last for a relatively long time, such as refrigerators, cars, and DVD players

question

nondurable goods:

answer

those goods that last a short period of time, such as food, light bulbs, and sneakers

question

nominal GDP:

answer

GDP measured in current prices and not adjusted for inflation

not as accurate because doesnt take into account rises in prices

question

real GDP:

answer

GDP expressed in constant, or unchanging, prices

question

gross national product:

answer

the annual income earned by U.S.-owned firms and people

question

depreciation:

answer

the loss of the value of capital equipment that results from normal wear and tear

question

price level:

answer

the average of all prices in the economy

question

aggregate supply:

answer

the total amount of goods and services in the economy available at all possible price levels

question

aggregate demand:

answer

the amount of goods and services in the economy that will be purchased at all possible price levels

question

How is GDP calculated?

answer

as the dollar value of all final goods and services produced within a country’s borders in a given year.

formula: C + I + G + EX - IM

question

Households

answer

Consumption (C)

the spending of people and families

ex: rent food and clothes

question

buisness

answer

Investment (I)

A company that sells goods or services

ex: rent machines advertising

question

Government

answer

government (g)

government spending

ex: roads court millitary

question

foreign trade

answer

Exports (EX) ~ made in the USA

what we produce and send to other countries to get money

question

foreign trade

answer

Imports (IM)

we buy goods for a price from other countries

question

What does GDP measure?

answer

measurement of how well a nation’s economy is doing for a particular year.

question

High GDP

answer

means the nation is doing really well

question

low GDP

answer

means the nation is doing poorly

question

GDP does not include?

answer

Nonmarket Activities—GDP does not measure goods and services that people make or do themselves.

The Underground Economy—GDP does not account for black market activities

Negative Externalizes—unintended economic side effects

Quality of Life—a high GDP does not necessarily mean people are happier

question

business cycle:

answer

a period of macroeconomic expansion followed by one of macroeconomic contraction

question

expansion:

answer

a period of growth as measured by a rise in real GDP

question

economic growth:

answer

a steady, long-term increase in real GDP

question

peak:

answer

the height of an economic expansion, when real GDP stops rising

question

contraction:

answer

a period of economic decline marked by falling real GDP

question

trough:

answer

the lowest point of an economic contraction, when real GDP stops falling

question

recession:

answer

a prolonged economic contraction

question

depression:

answer

a recession that is especially long and severe

question

stagflation:

answer

a decline in real GDP combined with a rise in the price level

question

leading indicators:

answer

a set of key economic variables that economists use to predict future trends in a business cycle

question

Phases of the business cycle

answer

peak, recession, trough, expansion

question

factors that affect a business cycle

answer

Business investment, interest rates and credit, consumer expectations, external shocks

question

Types of unemployment

answer

frictional, structural, cyclical, seasonal

question

frictional unemployment

answer

unemployment that occurs when people take time to find a job

question

structural unemployment

answer

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

question

Causes of structural unemployment

answer

-technology
-new resources
-consumer demand
-globalization
-education

question

cylical unemployment

answer

unemployment that rises during economic downturns and falls when the economy improves

question

seasonal unemployment

answer

unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season

question

Globalization

answer

the shift from local to global markets as countries seek foreign trade and investment

question

unemployment rate

answer

the percentage of the labor force that is unemployed

question

full employment

answer

the level of employment reached when there is no cyclical unemployment

question

Underemployed

answer

working at a job for which one is overqualified, or working part-time when full-time work is desired

question

How does inflation affect purchasing power?

answer

as inflation rises, purchasing power of money decreases

question

CPI

answer

(consumer price index) a measure of the overall cost of the goods and services bought by a typical consumer

question

what are three explanations for what causes inflation

answer

the growth of the money supply

changes in aggregate demand

changes in aggregate supply

question

inflation rate

answer

the percentage rate of change in price level over time

question

Hyperinflation

answer

inflation that is out of control

question

wage-price spiral

answer

higher wages leads to more inflation which leads to even higher wages

question

deflation

answer

a decrease in the general level of prices

question

market basket

answer

representative group of goods and services used to compile the consumer price index

question

progressive tax

answer

A tax for which the percentage of income paid in taxes increases as income increases

question

proportional tax

answer

A tax in which the average tax rate is the same at all income levels.

question

flat tax

answer

everyone pays the same dollar amount no matter the level of income

question

regressive tax

answer

A tax for which the percentage of income paid in taxes decreases as income increases

1 of 55

question

gross domestic product:

answer

the dollar value of all final goods and services produced within a country’s borders in a given year

tracks the exchanges of money

question

intermediate goods:

answer

products used in the production of final goods

question

durable goods:

answer

goods that last for a relatively long time, such as refrigerators, cars, and DVD players

question

nondurable goods:

answer

those goods that last a short period of time, such as food, light bulbs, and sneakers

question

nominal GDP:

answer

GDP measured in current prices and not adjusted for inflation

not as accurate because doesnt take into account rises in prices

question

real GDP:

answer

GDP expressed in constant, or unchanging, prices

question

gross national product:

answer

the annual income earned by U.S.-owned firms and people

question

depreciation:

answer

the loss of the value of capital equipment that results from normal wear and tear

question

price level:

answer

the average of all prices in the economy

question

aggregate supply:

answer

the total amount of goods and services in the economy available at all possible price levels

question

aggregate demand:

answer

the amount of goods and services in the economy that will be purchased at all possible price levels

question

How is GDP calculated?

answer

as the dollar value of all final goods and services produced within a country’s borders in a given year.

formula: C + I + G + EX - IM

question

Households

answer

Consumption (C)

the spending of people and families

ex: rent food and clothes

question

buisness

answer

Investment (I)

A company that sells goods or services

ex: rent machines advertising

question

Government

answer

government (g)

government spending

ex: roads court millitary

question

foreign trade

answer

Exports (EX) ~ made in the USA

what we produce and send to other countries to get money

question

foreign trade

answer

Imports (IM)

we buy goods for a price from other countries

question

What does GDP measure?

answer

measurement of how well a nation’s economy is doing for a particular year.

question

High GDP

answer

means the nation is doing really well

question

low GDP

answer

means the nation is doing poorly

question

GDP does not include?

answer

Nonmarket Activities—GDP does not measure goods and services that people make or do themselves.

The Underground Economy—GDP does not account for black market activities

Negative Externalizes—unintended economic side effects

Quality of Life—a high GDP does not necessarily mean people are happier

question

business cycle:

answer

a period of macroeconomic expansion followed by one of macroeconomic contraction

question

expansion:

answer

a period of growth as measured by a rise in real GDP

question

economic growth:

answer

a steady, long-term increase in real GDP

question

peak:

answer

the height of an economic expansion, when real GDP stops rising

question

contraction:

answer

a period of economic decline marked by falling real GDP

question

trough:

answer

the lowest point of an economic contraction, when real GDP stops falling

question

recession:

answer

a prolonged economic contraction

question

depression:

answer

a recession that is especially long and severe

question

stagflation:

answer

a decline in real GDP combined with a rise in the price level

question

leading indicators:

answer

a set of key economic variables that economists use to predict future trends in a business cycle

question

Phases of the business cycle

answer

peak, recession, trough, expansion

question

factors that affect a business cycle

answer

Business investment, interest rates and credit, consumer expectations, external shocks

question

Types of unemployment

answer

frictional, structural, cyclical, seasonal

question

frictional unemployment

answer

unemployment that occurs when people take time to find a job

question

structural unemployment

answer

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

question

Causes of structural unemployment

answer

-technology
-new resources
-consumer demand
-globalization
-education

question

cylical unemployment

answer

unemployment that rises during economic downturns and falls when the economy improves

question

seasonal unemployment

answer

unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season

question

Globalization

answer

the shift from local to global markets as countries seek foreign trade and investment

question

unemployment rate

answer

the percentage of the labor force that is unemployed

question

full employment

answer

the level of employment reached when there is no cyclical unemployment

question

Underemployed

answer

working at a job for which one is overqualified, or working part-time when full-time work is desired

question

How does inflation affect purchasing power?

answer

as inflation rises, purchasing power of money decreases

question

CPI

answer

(consumer price index) a measure of the overall cost of the goods and services bought by a typical consumer

question

what are three explanations for what causes inflation

answer

the growth of the money supply

changes in aggregate demand

changes in aggregate supply

question

inflation rate

answer

the percentage rate of change in price level over time

question

Hyperinflation

answer

inflation that is out of control

question

wage-price spiral

answer

higher wages leads to more inflation which leads to even higher wages

question

deflation

answer

a decrease in the general level of prices

question

market basket

answer

representative group of goods and services used to compile the consumer price index

question

progressive tax

answer

A tax for which the percentage of income paid in taxes increases as income increases

question

proportional tax

answer

A tax in which the average tax rate is the same at all income levels.

question

flat tax

answer

everyone pays the same dollar amount no matter the level of income

question

regressive tax

answer

A tax for which the percentage of income paid in taxes decreases as income increases

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