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;
19 Cards in this Set
- Front
- Back
Pr =
|
PI + D + CIT + UCP
|
|
What is included in income approach?
|
w (wages)
r (rent) i (interest) Pr (profits) IBT (indirect business taxes) NFFI (GDP-GNP) KCA (capital consumption allowance OR depreciation) |
|
price index =
|
prices in a given year
---------------------- prices in a base year |
|
% change in price =
|
new price - old price
--------------------- X 100 old price |
|
annual rate of inflation (ARI) =
|
% change in price
----------------- number of years (n) |
|
RGDP =
|
NGDP(nominal GDP)
---- PI (price index) ~df (in decimal form) |
|
Describe nominal GDP.
|
Nominal GDP is unadjusted for inflation; it describes current dollar value.
|
|
How can undemployment be determined?
|
# of people unemployed
---------------------- X 100 # of people in labor force |
|
Who is in the labor force?
|
1. People age 16 and older
2. Not in armed forces 3. Actively seeking employment |
|
Structual Unemployment
|
Change in technology; workers cannot compete
|
|
Frictional Unemployment
|
Qualified worker between jobs; time lags
|
|
Cyclical Unemployment
|
Unemployment resulting from downswing of business cycle.
|
|
Name the 4 phases of a business cycle:
|
1. Expansion
2. Peak 3. Recession 4. Trough |
|
What is the natural rate of unemployment?
|
minimal structual
minimal frictional zero cyclical |
|
Full employment
|
natural rate of unemployment; not zero unemployment
|
|
aggregate demand
|
all indvidual demand curves added together to include an overview of total economy
|
|
What causes a shift in aggregate demand?
|
Change in:
C (personal consumption expen) I (gross private domestic inv) G (government expen) NX (exports - imports) Ms (money supply) e (exchange rate) T (taxes) tastes and preferences income # of consumers price of compliment/substitute expected income or prices |
|
What causes a shift in aggregate supply?
|
Change in:
technology cost of resources # of producers shocks (+ or -) |
|
Does depreciation in U.S. money (exchange rate)increase or decrease our exports?
|
It will increase our exports, because it foreign countries can now buy more of our products at a lower price.
|