question
What is GDP?
answer
the total $ value of all FINAL goods and services produced within a country during one calendar year
question
What is the equation for real GDP?
answer
Nominal GDP/Price Index(in hundredths)
question
Name what goes into the expenditures approach for calculating GDP
answer
C: personal consumption expenditures
Ig: gross private domestic Investment
G: government purchases
Xn: net exports
Ig: gross private domestic Investment
G: government purchases
Xn: net exports
question
what's not included in GDP?
answer
-intermediate goods and secondhand sales
-non market transactions(housework)
-underground economy(black market)
-leisure
-purely financial transactions(stock market transactions)
-non market transactions(housework)
-underground economy(black market)
-leisure
-purely financial transactions(stock market transactions)
question
how does the income approach calculate GDP?
answer
Adds all the income received by owners of resources(land, labor, capital, entrepreneurship) in the economy. Includes profits and income earned by foreigners in the US.
wages + rents + interest + profits(proprieters' income + corporate profits) + taxes on production and imports
wages + rents + interest + profits(proprieters' income + corporate profits) + taxes on production and imports
question
What does the income approach not count?
answer
Does not count income and profits earned by US citizens abroad, transfer payments like social security, unemployment compensation, or certain interest payments. Also doesn't count depreciation and adjusts for discrepancies caused by misreported income
question
what is inflation?
answer
A general increase in the price level of the economy.
question
Who is hurt from inflation?
answer
savers, lenders, and people with fixed incomes.
question
Who benifits from inflation?
answer
borrowers
question
What are price indices and what are they used for?
answer
price indices measure price changes in the economy. They are used to compare the prices of a given bundle or "market basket" of goods in one year with the prices of the same bundle/market basket in another year.
question
what is the equation for GDP deflator?
answer
Nominal GDP/Real GDP x 100
question
What is nominal GDP?
answer
GDP in current prices, without adjustment for inflation
question
What is the labor force defined as?
answer
people who have a job and people who are not working but are actively seeking a job
question
What is the labor force participation rate?
answer
percentage of the population over the age of 16 that is in the labor force.
question
what is the percent change equation?
answer
change/beginning X 100
question
output growth equation
answer
[(real GDP year 2 - real GDP year 1)/real GDP year 1] x 100
question
What is the equation for the labor force participation rate
answer
Labor force/ population(16 or older) x100
question
Who is included in the labor force?
answer
The employed, those who are not working but are actively looking for work
question
Who ISNT included in the labor force
answer
People not working and not looking for work, people who are unable to work, people who choose not to work
question
What is the unemployment rate formula?
answer
number of unemployed/labor force x 100
question
What is frictional unemployment?
answer
People who are temporarily between jobs. They may have quit one job to find another, or they could be trying to find the best opportunity after graduating from high school or college
question
What is cyclical unemployment?
answer
People who are not working because firms do not need their labor due to a lack of demand or a downturn in the economy. Cyclical unemployment is due to the business cycle
question
What is structural unemployment
answer
Mismatches between job seekers and job openings. Unemployed people who lack skills or do not have sufficient education for available jobs are structurally unemployed
question
What type of unemployment is this(F, C, S, N)
Advances in technology make assembly line workers jobs obsolete
Advances in technology make assembly line workers jobs obsolete
answer
Structural
question
What type of unemployment is this(F, C, S, N)
An individual refuses to work minimum wage
An individual refuses to work minimum wage
answer
Frictional
question
What type of unemployment is this(F, C, S, N)
A skilled glass blower becomes unemployed when a new machine does her job faster
A skilled glass blower becomes unemployed when a new machine does her job faster
answer
Structural
question
What type of unemployment is this(F, C, S, N)
An individual has been laid off during a recession and has been looking for work unsuccessfully for so long that he has finally given up actively seeking a job(a discouraged worker)
An individual has been laid off during a recession and has been looking for work unsuccessfully for so long that he has finally given up actively seeking a job(a discouraged worker)
answer
Not employed
question
Is it counted in gdp?
A barbers income from cutting hair
A barbers income from cutting hair
answer
Yes, it's a service
question
GDP, is it counted and where(c, I, g, xn, nc )
A family pays a contractor 150,000 for a house built for them this year
A family pays a contractor 150,000 for a house built for them this year
answer
I
question
GDP, is it counted and where(c, I, g, xn, nc )
An accountant pays a tailor 175 to sew a suit for her
An accountant pays a tailor 175 to sew a suit for her
answer
C
question
GDP, is it counted and where(c, I, g, xn, nc )
The government makes a 30l social security payment to a retired person
The government makes a 30l social security payment to a retired person
answer
NC
question
GDP, is it counted and where(c, I, g, xn, nc )
You buy 100 dollars of McDonald's stock from the stock market
You buy 100 dollars of McDonald's stock from the stock market
answer
NC
question
GDP, is it counted and where(c, I, g, xn, nc )
You pay 800 a month to rent an apartment
You pay 800 a month to rent an apartment
answer
C
question
GDP, is it counted and where(c, I, g, xn, nc )
R.j. reynolds buys control of nabisco
R.j. reynolds buys control of nabisco
answer
NC
question
GDP, is it counted and where(c, I, g, xn, nc )
You buy a new toyota that was made in Japan
You buy a new toyota that was made in Japan
answer
Xn
question
Is it counted in gdp?
A monthly check received by an economics student who has been granted a government scholarship
A monthly check received by an economics student who has been granted a government scholarship
answer
No, transfer payments not included
question
Is it counted in gdp?
Cashing a us government bond
Cashing a us government bond
answer
No, financial asset, doesn't reflect production
question
Is it counted in gdp?
A social security check to a retired store clerk
A social security check to a retired store clerk
answer
No, transfer payment not included
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