Circular Flow and GDP
In relation to the circular flow chart (and also outside of it), this is the name of government payments to businesses.
What are subsidies?
In the base year, nominal and real GDP are ___
What is equal?
This is the age requirement for the labor force.
What is 16 years old?
This refers to the goods and services purchased by consumers.
What is market basket?
When there is unanticipated inflation people who lend money at fixed interest rates or people with fixed incomes will be ___ by inflation.
What is hurt?
This is widely known as the BEST measure of a nation's standard of living.
What is GDP per Capita?
This type of GDP is NOT adjusted for inflation.
What is nominal GDP?
This is the percentage of the population age 16 or older that is in the labor force.
What is the labor force participation rate?
This occurs when CPI falls.
What is deflation?
This is when prices are increasing at slower rates.
What is disinflation?
This is when we add up all the income earned from selling all final goods and services produced in a given year to get the GDP.
What is the income approach?
This is what nominal GDP represents on the money market graph.
What is the vertical axis?
A new graduate would likely be subject to this type of unemployment.
What is frictional unemployment?
This is the equation for real value.
Nominal Value
Real Value =-----------------------
Price Index / 100
This comes from when prices increase for the fixed market basket so consumers buy less of these products and alternatives may not be apart of the market based.
What is Substitution bias?
These are the four main limitations of GDP.
What are population, inequality, environment, and shadow economy (black market)?
The equation for Real GDP for the value of aggregate output is produced in a given period.
What is the Price of the Base Year times the quantity of the current year?
These are workers would like to be employed and have looked for a job in the recent past but are not currently looking for work.
What are Marginally Attached Workers?
The amount of money one earns in the form of wages or salary.
What is nominal income?
This is a decrease in general prices or a negative inflation rate
What is delation?
In the circular flow chart, ________ is the flow from households to financial markets.
What is (private) savings?
This is the equation for nominal GDP in terms of the income approach.
What is Nominal GDP=Rent+Wages+Interest+Profit
This is a type of structural unemployment where automation and machinery replace workers.
What is Technological Unemployment?
The result of CPI overstating inflation rate.
What is cost of living adjustments will be higher than they need to be?
These are the two ways to look at inflation over time.
What is inflation rate and price indices?