| 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. |
