Vocab
What is disinflation?
The process of bringing the inflation rate down.
How do you move from nominal GDP to real GDP?
Calculate the GDP deflator
There is 100,000 people in the labor force and 72,000 people unemployed. What is the unemployment rate.
72%
What costs cause high inflation on the economy?
Unit of account costs, menu costs, and shoe leather costs
GDP formula
GDP= C+G+I(x-IM)
What is cyclical unemployment?
unemployment that results from changes in the economy or the business cycle.
Name three scarce resources that are owned by households
Land, labor, and capital
If more factories opened in Texas what will happen to the unemployment rate?
The unemployment rate will go down
What is always the CPI of base year?
100
What is the unemployment rate formula?
# of unemployed
—————————-
# in the labor force
Define GDP
The dollar value of all final goods and services produced in a country’s borders in a given time period
To measure the economy’s growth with accuraccy you need to find the measure of the?
Aggregated output
If apple decides that they no longer need workers at the Genius Bar and make it all digital what will happen to the unemploymey rate?
The unemployment rate will go up
What is a measure of overall level prices in the economy?
Aggregate price level
Price index formula
(Cost of market basket in a given year/cost of market basket in base year)*100
What is the definition of real interest rate?
The nominal interest rate minus the rate of inflation.
How do businesses help reach financial goals?
They sell goods ans services for more than what they cost so that they can make a profit
Justin is working 4 days a week at the movie theater is he employed or unemployed?
Employed
Derek just signed a 2 year apartment in NYC lease while he works there for the next two years. Is he helped or hurt?
Helped
Price level formula
Percentage change in Price (% change in P) =( CPInew - CPIold/ CPI old)*100
What is nominal GDP?
the value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced
What is the value of the final goods and services produced calculated by using the prices of the base year?
Real GDP
What are the three types of unemployment?
Frictional, structual, cyclical
What is the inflation rate based upon
The CPI
What is NOT used to find GDP
A. Government spending
B. Transfer payments
C. Exports
B