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AP Macro Unit 2 Test
Unit 2 test
| Question | Answer |
|---|---|
| secondhand sales Financial Transactions 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 G=Government Purchases 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 -------------- = ? Price Index |
| 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 ------------- = ? Labor Force |
| 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 --------------- = ? Income |
| APS | Saving ---------- = ? Income |
| MPC | Change in Consumption ----------------------- = ? Change in Income |
| MPS | Change in Savings ------------------- = ? Change in Income |
| Wealth Expectations 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. |
Created by:
erikmurphy
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