question
Aggregate Expenditure (Y) =
answer
C + I + G + X - M (Consumption expenditure + investment + government expenditure + exports - imports)
question
Real GDP per person calculation
answer
real GDP/population
question
CPI equation
answer
(cost of CPI basket at current prices) / (cost of CPI basket at base year prices) x 100
question
Inflation Rate equation
answer
CPI this year - CPI last year / CPI last year x 100
question
GDP Deflator equation
answer
Nominal GDP/Real GDP x 100
question
Real GDP Growth Rate equation
answer
(real GDP this year - real GDP last year)/(real GDP last year) x 100
question
Real Wage Rate equation
answer
money wage rate/price level
question
Classical Growth Theory
answer
the view that the growth of real GDP per person is temporary and that when it rises above the subsistence level, a population explosion eventually brings it back to the subsistence level
question
Neoclassical Growth Theory
answer
- real GDP per person grows because technological change induces saving and investment that make capital per hour of labor grow
- growth ends if technological change stops because of diminishing marginal returns
- economic growth doesn't influence the pace of technological change
- technological change results from chance
- growth ends if technological change stops because of diminishing marginal returns
- economic growth doesn't influence the pace of technological change
- technological change results from chance
question
New Growth Theory
answer
- real GDP per person grows because of the choices people make in the pursuit of profit and that growth will persist indefinitely
- not determined by chance, but depends on how many and how much people are looking for new tech --> incentive
- discoveries are a public capital good
- knowledge isa public good
- no growth stopping mechanism
- not determined by chance, but depends on how many and how much people are looking for new tech --> incentive
- discoveries are a public capital good
- knowledge isa public good
- no growth stopping mechanism
question
In classical growth theory,
answer
real GDP per person keeps returning to the subsistence level
question
In neoclassical growth theory,
answer
diminishing returns to capital limit economic growth
question
In new growth theory,
answer
economic growth persists indefinitely at a rate determined by decisions that lead to innovation and technological change
question
M1 money supply
answer
currency, demand deposits, traveler's checks, and other checkable deposits
question
M2 money supply
answer
M1 plus highly liquid financial assets, including savings accounts, small time deposits, and retail money market mutual funds
question
Bank Assests
answer
(uses) Reserves, Loans, Securities
question
Bank Liabilities
answer
(sources) Deposits, Borrowings, Bank Capital
question
The Federal Reserve Assets
answer
US and Mortgage Backed Securities
question
The Federal Reserve Liabilities
answer
Currency (vault cash) and reserves of depository institutions
question
money multiplier
answer
1/reserve ratio
question
Reserve Ratio
answer
the fraction of deposits that banks hold as reserves
question
Producer Price Index (PPI)
answer
cost of 'basket of goods' produced / cost of 'basket' produced in the base year x 100
question
Unemployment rate
answer
the percentage of the labor force that is unemployed
question
required reserve ratio
answer
The minimum fraction of deposits banks are required by law to keep as reserves
question
Moral Hazard
answer
When the act of insuring an event increases the likelihood that the event will happen
question
labor productivity
answer
real gdp in an hour
question
discouraged workers
answer
individuals who would like to work but have given up looking for a job
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
