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Econ 381 Ch1&2
Macroeconomics
| Question | Answer |
|---|---|
| Another word for elegant | Juli Jackson |
| Macroeconomics | The study of the economy as a whole |
| GDP | The market value of all final goods and services produced within an economy in a given period of time. |
| Models | Economic models illustrate, often in mathematical terms, the relationships among variables |
| Endogenous Variables | Endogenous variables are those variables that a model tries to explain. Ex. Quantity of pizza exchanged. |
| Exogenous Variables | Exogenous variables are those variables that a model takes as a given. Ex. Aggregate income & Price of materials. |
| Market Clearing | The price of a good or service moves quickly to bring quantity supplied and quantity demanded into balance. |
| Flexible Prices | Prices of G&S adjust instantly to changes in S&D. |
| Sticky Prices | Prices of G&S adjust slowly to changes in S&D. |
| Microeconomics | The study of how households and firms make decisions and how these decision makers interact i the market place. |
| Stock | A quantity of measure at a given point in time. (ex. A persons wealth, the number of people unemployed people in the economy, the amount of capital in the economy, and the government debt are examples of stock). |
| Flow | A quantity measured per unit of time. (ex. Income and expenditure, the number of people losing their jobs, the amount of investment, and the government budget deficit are flows). |
| Imputed Value | An estimate value where an actual value is not available - Such as the price that one rents their own home from themselves |
| What is included as an imputed value to GDP? | The price of wages for police, fire fighters,senators, the price we rent our own home from ourselves. |
| What is NOT included as an imputed value to GDP? | Lawn mower, car, jewelry, cooked meals in home |
| Nominal GDP | The value of goods and services measured at current prices |
| Real GDP | The value of goods and services measured using a constant set of prices (base year prices) |
| GDP Deflator | Reflects what is happening to the overall level of prices in the economy |
| GDP Deflator = ? | GDP Deflator = (Nominal GDP / Real GDP) |
| Nominal GDP = ? | Nominal GDP = Real GDP x GDP Deflator |
| Real GDP = ? | Real GDP = (Nominal GDP / GDP Deflator) |
| Y = ? | Y = C+I+G+NX Y = GDP C = Consumption I = Investment G = Government Purchases NX = Net Export (export - imports) |
| National Income Accounts Identity | Y = C+I+G+NX |
| Consumption | Goods and services bought by households * Nondurable goods (food and clothing) * Durable goods (cars and TVs) * Services (haircuts doctor visits) |
| Investment | Goods bought for future use * Business fixed investment (PPE) * Residential investment (New housing) * Inventory Investment (increase in firms' inventories of goods (if inventories are falling, inventory investment is negative) |
| Government Purchases | Goods and services bought by federal, state, and local governments. Includes Military equipment, highways, services provided by gov workers. DOES NOT include transfer payments to individuals such as S.S. & welfare. |
| Net Exports | Accounts for trade with other countries |
| GNP | Gross National Product - Where as GDP measures the total income produced domestically, GNP measures the total income earned by residents of a nation. |
| GNP = ? | GNP = GDP+Factor Payments from Abroad - Factor Payments to Abroad |
| CPI | Consumer Price Index |
| What is CPI? | The CPI is the price of a basket of goods and services relative to the price of the same basket in some base year. |
| Laspeyres Index | A price index with a fixed basket of goods. (CPI) |
| Paasche Index | A price index with a changing basket of goods. (GDP Deflator) |
| Employed | Includes paid employees, those who work in their own business, or unpaid workers in a family member's business. |
| Unemployed | Includes those who were not employed, were available for work, and had tried to find employment during the previous four weeks. Includes those waiting to return from a lay-off. |
| Labor Force = | Employed + Unemployed |
| Unemployment Rate = | (Number of Unemployed / Labor Force) x 100 |
| Labor-force participation rate | The percentage of adult population that is in the labor force. |
| Labor-force participation rate = | (Labor Force / Adult Population) x 100 |
Created by:
justintucker
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