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ch 19 macro life
| Question | Answer |
|---|---|
| national income | final market value of all G&S produced in the economy in a defined period of time |
| GDP(Y) | WRiP = (wages and salaries)+(economic rent)+(interest)+(profits) - flow of income - return to factors of production |
| GDP(E) | CIGnetX - flow of expenditures - return to flow of output |
| nominal | actual = current= money = Δ P and/or Q |
| real | $ constant - only ΔQ, holding P content to base your values |
| how do you calculate real values? | = nominal/price |
| potential national income = Y* = Yfe | max real output if all inputs are used at normal utilization rate |
| output gap | y - y* |
| recession | 2 quarters of negative growth |
| depression | persistent low growth, high u, excess capacity |
| economic growth | increase in real potential GDP/capita over time |
| employment | # of workers, 15+ who have A job (full, part, temp, self-employed) |
| unemployment | # of workers, 15+ who are willing and able to work but have NO job |
| labour force | = employment + unemployment |
| unemployment rate (u) | = unemployment/labour force |
| employment rate | = employment/population |
| productivity | real output/unit of input (LNKTE) |
| frictional | turnover from switching jobs |
| structural | mismatch in skills and jobs = ΔT |
| cyclical | ups and downs in business cycle |
| full-employment (y*) | frictional and structural u = NAIRU |
| labour productivity | real output/unit of labour input, measured /worker or /hour worked |
| key macro variables? | YUPie |
| price level (P) | average price of all prices in the economy (CPI) |
| inflation | increase in P |
| CPI | index of "weighted average price" of all G&S in "representative basket" of goods (base year 2002) |
| purchasing power | # of goods than can be purchased /dollar |
| interest rate | cost of borrowing money |
| "the" interest rate | the mean of all I-rates (yield curve) |
| prime rate | rate chartered banks charges preferred customers |
| bank rate | rate BOC charges chartered banks |
| nominal I-rate | current cost of borrowing |
| real I-rate | nominal I-rate corrected for changes in purchasing power |
| real I-rate formula | = nominal i-rate - inflation rate |
| foreign exchange | actual foreign currency |
| foreign exchange market | market for foreign exchange |
| external value (ev) | price of domestic currency in foreign dollars |
| exchange rate (e or ER) | price of foreign currency in domestic dollars |
| appreciation | rise in ev = fall in ER |
| depreciation | fall in ev = rise in ER |
| BOP | summary record of country's transaction with rest of world |
| BOT | netX |
Created by:
sarahveresch
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