ECO285 Midterm 1

PPC

100

What does a point outside of the PPC represent?

That point is unattainable with the given amount of inputs

200

Additional benefit above and beyond what has already accrued is _____

Marginal benefit

300

Biased technological increase causes a ____ in the PPC.

Pivot

400

If the slope of the PPC is flat, there is _____, and if the slope is steep there is a _____

Low opportunity cost;high opportunity cost

500

"must give up more and more of one good to make another one" is known as _______

Law of Increasing Opportunity Costs

Definition of GDP

100

Payments made by the government to aid households, such as social security checks, are called ____ and they ____ counted in GDP.

Transfer payments; are not

200

"Other countries" are the economic actor for which component of GDP?

Net exports

300

What is GPI?

Genuine Progress Indicator: includes social goals such as pollution, reduction, education and health.

400

If GDP=635,000; C= 350,000, G= 146,000 X= 94,000, M= 33,000, what is I=?

I= 78,000

500

List all factors of production for the components of the income approach for GDP (wages, rent, interest, profits)

wages=labor

rent=land

interest=capital

profits=entrepreneurship

GDP calculations

100

What is the aggregate expenditure approach to calculate GDP?

Consumption +Investment + Government spending + Net exports

200

What is the per capita GDP calculation?

GDP/population

300

GDP deflator is 97 and nominal GDP (in billions) is $18,779, what is real GDP?

Real GDP = 19,359.8

400

If real GDP is $19,769 and the GDP deflator is 97, what is nominal GDP?

Nominal GDP= $19,175.93

500

Real GDP 2023= 20,102

GDP deflator 2023= 98

Real GDP 2024= 20,893

GDP deflator 2024=99

What is the growth rate in nominal GDP from 2023 to 2024?

5.01%

Business cycle/unemployment

100

A decline in real output that persists for more than two consecutive quarters of a year is a _____

Recession

200

What is the official unemployment rate?

U3: must be willing and able to work and actively looking for work.

300

Caused by the institutional structure of an economy or by economic restructuring making some skills obsolete is _____

Structural unemployment

400

800,000 people in the labor force

547,000 are employed

What is the unemployment rate? Round to one decimal place.

31.6%

500

560,000 people in the population.

228,000 are not in the labor force.

208,000 are employed. 

What is the labor force participation rate and the unemployment rate?

LF participation rate: 59.3%

Unemployment rate: 37.3%

Random

100

What is the GDP growth rate equation? 

(New GDP-old GDP)/old GDP

200

What is the income approach to calculate GDP?

Wages + Rents + Interests + Profits

300

What is the difference between deflation and disinflation?

Deflation: decrease in price level

Disinflation: decrease in the rate of inflation

400

What is the nominal GDP equation?

(real GDP/100)*GDP deflator

or

(GDP deflator/100)*real GDP

500

List three issues and limitations of GDP

Non-market activity, informal sector, household production, leisure time