Economic Indicators
This is the formula to calculate the Output Expenditure Model of GDP.
What is C + Ig + G + NX?
This curve in the AD/AS model identifies the full employment output level of the economy.
What is the Long-Run Aggregate Supply Curve (LRAS)?
These terms are the labels for either side of a banking balance sheet.
What are Assets and Liabilities?
Government spending and taxes represent this type of policy.
What is Fiscal Policy?
This account in the balance of payments measures net exports, investment income, and net transfers for a country.
What is the current account?
A person who loses a job due to an economic downturn is suffering from this type of unemployment.
What is cyclical unemployment?
Changes to prices/availability of resources, technology, or productivity are determinants of this short-run curve.
What is Short-Run Aggregate Supply (SRAS)?
These type of reserves are an asset for a bank, with which the bank can do what they want.
What are Excess Reserves?
In an ample reserves system, these rates are changed by the central bank as a means of conducting monetary policy?
What are administered rates (discount rate/interest on reserves)?
In the FOREX Market for the dollar, an increase in interest rates in the US would lead to this change in the exchange rate for the US Dollar.
What is appreciation? (Increase in $-Demand, or Decrease in $-Supply).
This metric is commonly used to calculate inflation rates.
What is the Consumer Price Index (CPI)?
If domestic interest rates decrease, this is the short-run effect on the AD/AS model.
What is an increase in Aggregate Demand?
If a customer deposits $5000 into a bank with a reserve requirement ratio of 10%, this is the change in Excess Reserves.
What is $4500? ($5,000 x .1 = $500; $500 - Required Reserves; $4500 - Excess Reserves)
In a limited reserves system, the central bank will change the reserve requirement ratio or the discount rate, or buy or sell government securities to change this, initially.
What is the Money Supply?
When a country's currency depreciates, this change happens to its Net Exports.
What is Increase?
This is the formula to calculate real GDP given a nominal GDP and the GDP Deflator.
This is the maximum change in GDP when the government decreases spending by $100 Billion while the country's MPC is .5.
What is a decrease of $200 Billion in GDP? (Spending multiplier= 1/.5 = 2; -$100 Billion x 2 = -$200 Billion)
What is Demand Deposits?
What is unemployment?
What is the Capital/Financial Account?
The actual unemployment rate is 9%, while the frictional unemployment rate is 1% and the cyclical unemployment rate is 6%, which means this is the Natural Rate of Unemployment.
What is 3%?
(9% - 1% - 6% = 2%; 1% + 2% = 3%)
This term identifies the reason why Short-Run Aggregate is upward sloping.
What is sticky wages?
A country's Central Bank buys $100 Billion worth of bonds from a commercial bank with a reserve requirement of 5%. This is the maximum possible change to the Money Supply after the bond purchase.
What is $2 Trillion? (Money Multiplier = 1/.05 = 20; $100 Billion x 20 = $2,000 Billion or $2 Trillion).
The government increases deficit spending while at the same time the Federal Reserve decreases administered rates. This is the effect on interest rates as a result of both policies.
What is no change?
Imagine the US government increases its deficit spending. Net Capital Inflow would change in this direction.
What is Increase?