Circular Flow & GDP
Unemployment
Price Indices & Inflation
Costs of Inflation
Real vs. Nominal GDP & Business Cycle
Limits of GDP & GDP Questions
100
This is the dollar value of all final goods and services produced within a country in one year.
Gross Domestic Product (GDP)
100
This is the natural rate of unemployment in the United States.
4%-6%
100
Inflation reduces this characteristic of money.
value / purchasing power
100
These people oftentimes benefit from inflation.
Borrowers / debtors
100
This is GDP not adjusted for inflation.
Nominal GDP
100
This may actually be a better way of measuring the standard of living than GDP
GDP per Capita
200
Macroeconomics was created in response to this historical event.
The Great Depression
200
These are the three types of Unemployment
Structural, Frictional, Cyclical
200
This is the CPI of Year 1 given the market basket of the following:
Milk $3
Apples $2
Cheese $2
$7
200
These three groups of people are likely hurt by inflation.
Fixed income earners, lenders, & savers
200
This, adjusted for inflation, is the highest grossing film of all time.
Gone with the Wind
200
These are goods and services that provide value but do not count towards GDP.
Nonmarket Transactions
300
This is the formula for the change in GDP in any given year.
% Change in GDP = ((Year 2 - Year 1) / Year 1) X 100
300
Someone who looses their as a shoemaker is experiencing this type of unemployment.
structural
300
When people hoard money or assets, it may be an indicator that this is happening.
Deflation
300
Germany experienced Hyperinflation in the 1920s mainly as a result of this.
WWI & Treaty of Versailles
300
This is the formula for calculating the GDP deflator.
GDP Deflator = (Nominal GDP / Real GDP) x 100
300
This country, despite its large GDP, is actually not highly ranked in overall happiness.
China
400
This is a payment made by the government that redistributes wealth in the form of things like welfare and social security.
Transfer Payments
400
This is the formula for the unemployment rate.
Unemployment Rate = (#unemployed / # in labor force) X 100
400
This is the formula for calculating CPI.
(Price of Market Basket / Price of market Basket in Base Year) X 100
400
This is when money doesn’t reliably measure the value of goods/services.
Unit of Account Costs
400
The difference between a Peak and the Real GDP is called this.
Positive Output Gap.
400
In the Formula GDP=C+I+G+X, this is the biggest part of GDP.
C, Consumption, ~70% of the economy
I, Investment, ~15%
G, Government, ~19%
X, Net Exports, ~5%
500
Define and Explain the 3 ways of calculating GDP.
Expenditures Approach-Add up all the spending on final goods and services produced in a given year.
Income Approach-Add up all the income earned from selling all final goods and services produced in a given year.
Value-added Approach-Add up the dollar value added at each stage of the production process.
500
These are three big criticisms of the unemployment rate
Discouraged Workers
Underemployment
Racial/Age Inequalities
500
This is the inflation rate of this year if the CPI for this year is 240 and the CPI for last year is 200.
20%
500
This is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.
Stagflation
500
During an economic recession, producers of these good tend to suffer, but but producers of these goods tend to do okay.
durable; non-durable
500
These goods are not counted in GDP, as they would be double-counted in the final product.
Intermediate Goods