Macroeconomic from Chapters 5-9 of Economics
Terms
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- What are the goals of Macroeconomics?
- To create price stability (low and stable inflation rate) high emplyment, high and sustained economic growth
- What are some of the policies associated with Macroeconomics.
- Fiscal Policy and Monetary Policy
- What is CPI?
- Consumer Price Index: A widely cited index number for the price level; the weighted average of prices of a specific set of goods and services purchased by a typical household.
- How do u Figure CPI?
- CPI of the later year - CPI of the ealier year over CPI of the earlier year...all that X 100
- What is Inflation?
- An increase in the price level.
- What is Real Income?
- Nominal Income adjusted for price changes.
- What is Nominal Income?
- The Current dollar amount of a person's income.
- How do you calculate real income?
- Nominal income divded by CPI times 100
- The labor force is made up of what two groups?
- Employed(those already working) and the Unemployed(those who ar not working now but could and would if job was available.)
- How do you calculate unemployment rate?
- Nuber of unemployed divided by the Civilian labor force all that times 100
- what is Frictional Unemployment?
- Caused by frictions in the economy such as info problems, worker or labor mobility (unemployment between jobs)
- what is structural unemployment?
- Caused by structural changes in the economy due to technological changes AkA: Mismatched unemployment
- what is cyclical unemployment?
- casued by declining demand for goods during recessions.
- what is natural unemployment?
- frictional unemploy. plus structural unemploy.
- what is full employment?
- when actual unemployment = natural unemployment
- What is GDP?
- Gross Domestic Product: the total market value of final goods and services produced domestically over one year.
- what does GDP omit?
-
1.)Intermediate group: things like ink and paper in a book
2.)None market goods
3.)Underground activities
ect... - what is the value added method?
- every process the product goes through is taxed and added on...until it gets to the buyer
- what is Expenditure method?
- GDP=consumption+investment+govt. purchases+net exports
- What is income method?
- GDP=Domestic Income+ Indirect business taxes +Capitol Consumption allowance(AKA depreciation)