Econ Unit 4
Terms
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- What is Gross Domestic Product?
- GDP, Is the total value of all new goods and services producaed in a country.
- What are the ways you can measure GDP?
- 1)The Expenditure Approach 2)Income Apporach
- What does the Expenditure approach include?
- Consumer spending, business investments, government spending and net exports
- What does the Income Approach Include?
- Wages, interest earnings, profits, and rent
- What does GDP not include?
- -value of used product -volunteer work -purley financial transactions -value of intermediary goods -unreported economic activity -illegal economic activity
- What is nominal GDP?
- GDP expressed in the dollar value of a givin year(aka current GDP)
- What is Real GDP?
- GDP for one year expressed in the dollar of another base year (aka constant GDP) *removes inflation
- Define Inflation.
- Ageneral rise of prices accross an entire economy.
- What is Price Index?
- A number that tells us how much prices have changed since a basse year (%)
- What are Market Basket goods?
- They are used to construct a price index and is a sampling of commonly purchased goods.
- What are the 3 typesof price indexes?
- 1)Implicit price deflator 2)Consumer price index 3)Producer price Index
- What is an Implicit price deflator?
- The broadest measure of price changes.
- What is the Comsumer Price Index?
- Measures inflation for consumer products.
- What is the Producer Price Index?
- Measures inflation in resource prices.
- What is the equation to calculate the past price to current price?
- the salary in nominal $ * (CPI un recent year/CPI in old year)
- What is Per Capita GDP?
- Used to compare different national economies on a per person basis.
- How do you calculater per capita GDP?
- GDP/population
- What are the 4 types of Unemployment?
- 1)Frictional Unemployment 2)Structral Unemployment 3)Cyclical Unemployment 4)Seasonal Unemployment
- What is Frictional unemployment caused by?
- People choosing to quit thir jobs or people waiting to start new jobs
- What is Structral Unemployment caused by?
- cahnges in economy that result in peoples skills becoming obsolete
- What is cyclical unemployment caused by?
- Flutuations in the business cycle.
- What is Seasonal unemployment caused by?
- Changes in the season.
- What are the phases of the business cycle?
- Expansions, Peaks, Contractions, Troughs
- What is the natural rate of unemployment?
- the lowest possible unemployment rate or full employment (3-4%)
- What are economic indicators?
- specidific economicactivites that have goos intication of the general activity within the economy. (leading, coincident, lagging)
- What are factors that shift aggregate demand?
- changes in consumer spending and changes in investment business spending
- What is aggregate supply?
- A schedule graphically represented as a curve which shows the level of real domestic output (GDP) avaliable at each posssible price level.