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. |