Intro to Economics
These type of goods have use or value over a long period of time.
Durable goods.
The goal of developed countries is to keep GDP between what 2 numbers?
1-3%
The rate that the general price of goods and services is rising, and the buying power of consumers is falling as a result.
Inflation
True or False: The business cycle follows a steady pattern, unchanging over time.
False.
The percentage of the labour force that is actively trying to find a job, but does not have one.
The Economic principle that describes a consumers willingness and ability to pay a price for a specific good or service.
Demand
For developing nations, they can withstand what range of GDP growth?
5-10%
When the price of money changes so rapidly (quickly) that it becomes essentially worthless. Example: Germany in 1922/23
Hyper-Inflation
This is a common indicator of the business cycle, but it is only recorded on a quarterly basis and therefore other metrics must be consulted.
GDP
This type of unemployment is caused when there is a mismatch between the amount of workers and the amount of job.
Structural Unemployment
The benefits you could have received from taking an alternative action.
Opportunity cost.
The term for raw GDP, unadjusted for inflation
Nominal GDP
This weakness of the CPI doesn't account for when a consumer will choose a different, less expensive product when the price of the "basket" product increases.
Substitution Bias
These three indicators are used to inform the direction of the business cycle.
Employment, Personal Income, Industrial Production.
This concept suggests that a certain amount of unemployment is unavoidable due to the time it takes for employees and employers to find the right match.
Frictional Unemployment
The total amount of a specific good or service available to consumers.
Supply
The main approach to calculating GDP, where an economists sums consumption, government spending, investments and net exports.
Expenditure approach.
An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.
Purchasing Power Parity
What is the term for an economic downturn in the business cycle? What is a really severe version of this concept?
Recession, Depression.
The "baseline" amount of unemployment, according to Milton Friedman.
Natural rate of unemployment.
These types of goods have a short useful lifespan, often consumed immediately or shortly after purchase.
Non-durable goods.
What are the 2 alternatives to the Expenditure approach of calculating GDP.
Product, and Income approach.
A fixed, never or rarely changing "basket" of goods and services that the average consumer pays for in a month.
CPI or Consumer Price Index.
What stage of the business cycle is Canada currently in?
Expansion
(1) This type of action is when a central bank adjust interest rates to control aggregate demand in an economy.
(2) This type of action is when a government adjusts policy, public spending and taxation to control the total demand for goods and services in the economy
(1) Monetary Policy
(2) Fiscal Policy