Consumer Price Index
This is used to help calculate the inflation rate.
Consumer Price Index (CPI)
What is the Price Level?
Average of current prices for a broad number of goods and services
What is the difference between nominal and real GDP.
Nominal GDP does not take inflation into account (i.e. normalization that accounts for inflation is not factored into the nominal GDP calculation.)
In this type of market structure, the supplier has the most pricing power.
Monopoly
What are the three types of unemployment
Frictional, cyclical, structural.
CPI is the average ____ in prices of a ____ basket of goods and
change; fixed
Describe disinflation versus deflation
Disinflation: Positive, but decreasing inflation rate
Deflation: Negative inflation rate
The equation for GDP is:
C + I + G + NX (Consumer spending + business investments + government spending + next exports)
When firms are 'price takers' it means they have this much pricing power.
None
(Based on last weeks lesson) - Name the 4 types of externalities.
Positive: Creates benefits for others
Negative: Imposes costs on others
Production: Firm-Side
Consumption: Individual-Side
The GDP Deflator is used to _____
compute how prices in the whole economy have changed
In order to decrease inflation, the ____ ___ increases the ____ ____ for the Fed Funds Rate
Federal Reserve; Target Range
Real GDP is expressed by comparing to a ___ year's market price, rather than the current year's market price.
Base
Monopolistic Competition - this market structure is characterized by a ____ number of firms and ___ barrier to entry.
high, low
Define market efficiency
The idea that asset prices fully reflect all available information
Defin inflation rate
% change in overall price level over time
True/False - High inflation increases consumer purchasing power.
False
Name two significant limitations of the GDP, from the PIES framework
P - Population differences (GDP Per Capita Needed)
I - Inequality (Varying income distributions)
E - Exclusions (Omits non-market transactions)
S - Sustainability (Omits environmental degradation/externalities
In an oligopoly, the demand curve is unique because it is a ___ demand curve.
kinked
Explain the difference between the price elasticity of supply and price elasticity of demand
Supply: How much supply changes when price changes
Demand: How much demand changes when price changes.
Typical consumers commonly = ?
Urban consumers
Based on the slides, the price of coffee has gone up approximately ___x due to inflation in the last 50 years (give multiple number e.g. 2x)
12x
This is the form of GDP that is used to interpret the GDP in relation to the population of a country.
GDP per capital.
kinked
Soham is currently jobless. He is looking for a job but hasn't found one in 6 months. Thus, Soham stopped looking for a job, and just sits on his couch eating chips. He gave up, and hasn't left his room in 3 months. Is Soham unemployed? You MUST justify your answer.