AP Macro Unit 2 Test
Unit 2 test
Transfer Payments ||Whats not counted in GDP?|
|The GDP per person; the average GDP per population ||Per capita GDP|
|C=Personal Consumption Expenditures
Ig=Gross Private Domestic Investment
Xn=Net Exports (Exports-Imports)
C+Ig+G+Xn=GDP ||Whats counted towards GDP?|
|Demand-Pull Inflation ||caused by an increase in aggregate demand |
|Cost-Push Inflation ||caused by reduction in aggregate supply|
|Hyperinflation ||A very rapid rise in the price level |
|Okun's Law ||The generalization that any 1 percentage point rise in the unemployment rate above the full unemployment rate will increase the GDP gap by 2percent of the potential output of the economy |
|Price index ||Price Index in given year = price of market basket in specific year DIVIDED BY price of same market basket of base year X 100|
|Nominal GDP ||Units of Output X Price Per Unit=?|
|Real GDP || Nominal GDP
-------------- = ?
|Costs Of Living Adjustments (COLA) ||An automatic increase in the incomes(wages)of workers when inflation occurs; guaranteed by a collective bargaining contract between firms and workers. |
|Consumer Price Index (CPI) ||An index that measures the prices of a fixed "market basket" of some 300 goods and services bought by a typical consumer.|
|Unemployment Rate || Unemployed
------------- = ?
|Who is counted in the labor force? ||Those willing and able to work
Those who are unemployed but actively seeking for work|
|Natural Rate of Unemployment ||The Unemployment rate occurring when there is no cyclical unemployment and the economy is achieving its maximum potential |
|APC || Consumption
--------------- = ?
|APS || Saving
---------- = ?
|MPC || Change in Consumption
----------------------- = ?
Change in Income|
|MPS || Change in Savings
------------------- = ?
Change in Income |
Real Interest Rates
Household Debts ||Determinates of Consumption and Savings |
|Gross Domestic Product (GDP) ||the dollar value of all final goods and services produced within a country's border in one year.|