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economics test 2
chapters 6 and 7
| Question | Answer |
|---|---|
| national income is... | a way for economists to measure national economic health |
| GDP is | gross domestic productmeasures MARKET VALUE of all newly produces goods and services within a given year |
| to avoid double counting a firm must... | count and include ONLY final goods (which dont require further processing prior to sale) |
| public transfer payment is .... | NOT INCLUDED IN GDPmoney from government to people for temp need (unemployment or disability) |
| expenditure approach to calculate GDP | Y=C+I+Xn(exports-imports)+(governments spending) |
| Income approach to calculate GDP | add: wages, rent interests, proprietors income, corporate tazes, taxes and imports and productionTHENSubtract: statistical discrepency, consumption of depreciative goods, net foreign factor |
| REAL GDP calculation/ reasonings | HAS BEEN ADJUSTED FOR INFLATION RealGDP= nominal GDP (todays $) ---------------------- price index |
| calculate price index with | price index= nominal GDP ----------- real GDP |
| what are the 4 points in the business cycle | A)expansionB)peakC)contractionD)trough (when to invest) |
| what are the 4 types of unemployment | A)frictional (between jobs)B)cyclical (due to change in economy)C)structural (change in ER;EE needs to retain and redevelop skills)D)seasonal (between seansons or weather) |
| how is unemployment calculated | <number unemployed DIVIDED by number in labor force (16+ willing and able to work)>X100 |
| cost push inflation | cost increase for producer means the increase gets pushed onto the consumer |
| economic growth is measured as? | A) increase in real GDP over some period of timeB) increase in real GDP per capita over some time |
| demand pull inflation | consumers side of spectrumincrease in prices due to consumers demandSPENDING>PRODUCTION (ie:wii in the beg) |
| what is the rule of 70 and what does it measure | provides a base to find number of years for GDP to double annual percentage increasecalculate:70/rate of given variablegrowth rate=GDP inflation=inflation |
| real GDP percapita means | per capita means per person; so the average income of people (working) in the nationcalculate:realGDP/population of working |
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brandimarie87
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