Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
30 Cards in this Set
- Front
- Back
GDP
|
-gross domestic product
-the market value of all final goods and services produced in the United States during a given period, usually a year -primary rule: no double counting -formula: C+I+G+(X-M) |
|
GDP per Capita
|
-GDP divided population
-most important measure for comparing nations |
|
5 things GDP misses
|
household activity, quality/variety, depreciation, underground economy, externalities
|
|
Consumer Price Index
|
lumps many goods together into one unit and then looks at how inflation affected that unit (unit is called a market basket)
-calculate: (newer year/base year)x 100 |
|
aggregate demand and aggregate supply
|
intersection shows price level(y-axis) and real GDP(x axis)
show an entire economy's demand for goods and services as well as an entire economy's supply of goods and services, for one year |
|
Nominal GDP
|
GDP based on prices at the time of the transaction; current dollar GDP
|
|
Real GDP
|
the economy's aggregate output measured in dollars of constant purchasing power; GDP measured in terms of the goods and services produced
|
|
4 sources of economic growth
|
add resources, improve quality of existing resources, technology, better rules of game
|
|
PPF grows with more capital goods made over consumer goods
|
improves stock of resources
|
|
labor productivity
|
total output divided by hours of labor
|
|
capital deepening
|
improving both physical and human capital
|
|
3 economic sectors
|
agricultural, industry, service
|
|
why the third world exists
|
relative global inequality today
|
|
basic research
|
the search for knowledge without regard to how that knowledge will be used; a first step toward technological advancement; ie: universities
|
|
applied research
|
research that seeks answers to particular questions or applies scientific discoveries to develop specific products; ie: bionic arm
|
|
pros and cons of technological change
|
removes jobs, creates jobs
creates more jobs than it removes because it creates entire industries |
|
industrial policy and political spectrum
|
communism, socialism, modern democracies, laissez faire capitalism, anarchy
|
|
4 kinds of unemployment
|
seasonal, frictional, structural, cyclical
|
|
full employment
|
occurs when there is no cyclical unemployment; relatively low unemployment
can be achieved through fiscal and monetary policy |
|
underemployment
|
workers are overqualified for their jobs or work fewer hours than they would prefer
|
|
unemployment rate
|
the number of people looking for work (unemployed) divided by the number in the labor force
|
|
labor force
|
those in the adult population who are either working or looking for work
|
|
labor force participation rate
|
number in labor force divided by adult population
|
|
unemployment benefits
|
money provided to people who lose their jobs from cyclical employment
cons- people want to stay on them |
|
inflation
|
an increase in the economy's general price level
|
|
cost push inflation and demand pull inflation
|
cost push=worst (economic contraction)
demand pull=economic growth bc higher equilibrium |
|
nominal interest rate
|
not adjusted interest rate, the interest rate the bank gives you
|
|
real interest rate
|
nominal minus inflation
|
|
4 schools of economic thought
|
classical, Keynesian, monetarist, supply side
|
|
the Laffer curve
|
to increase dollar amount of taxes, raise tax rates
backward bending->raise taxes too high and people will opt out of work force |