Ap Macroeconomics Unit 2 Test Answers – Flashcards
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NBER
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National Bureau of Economic Research
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GDP
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The monetary value of all the finished goods and services produced within a country's borders in a specific time period
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PPI
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Producer Price Index
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CPI
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Consumer Price Index
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COLA
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Cost of Living Adjustments
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BLS
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Bureau of Labor Statistics
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NRU
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Natural Rate of Unemployment
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Business Cycle
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a cycle or series of cycles of economic expansion and contraction
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C + I + G + (Ex - Im)
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GDP =
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GDP Includes
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Goods and services currently produced, not transactions involving goods produced in the past. Tangible(products)/intangible(services) goods. All items produced in the economy and sold legally in markets. Within geographic confines of the countr
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Consumption, investment, government sending, net exports
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What are the components of GDP?
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Consumption
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Largest component of GDP
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65-70%
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How big is GDP consumption?
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Gross Investment
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Net investment + depreciation
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Net Investment
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Gross Investment - depreciation (can be negative)
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Real GDP
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GDP adjusted for inflation
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Nominal GDP
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The value of final goods and services evaluated at current-year prices
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GDP
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Largest price index (yearly)
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Producer Price Index
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(Monthly) Measures price changed received by domestic producers for their output
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Consumer Price Index
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(Monthly) An index of the cost of all goods and services to a typical consumer
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Borrowers (anybody who pays with money worth less)
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Who gains from inflation?
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Unemployment
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The number of Americans who are out of work but actively looking for a job. The number does not usually include those who are not looking
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Employed + Unemployed
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Total labor force =
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Unemployment Rate
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As measured by the Bureau of Labor Statistics, the proportion of the labor force actively seeking work but unable to find jobs
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Labor Force Participation Rate
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(Labor force/ Non- institutionalized population)*100
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Full Employment
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94-96% employment or unemployment of 4-6%
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Cyclical Unemployment
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unemployment that rises during economic downturns and falls when the economy improves
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Price change
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Inflation =
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Price Change
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Inflation is _____
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Nominal - Inflation
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Real Income/Interest Rates =
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U3
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Official Unemployment rate
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Investment
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Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories
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Disinvestment
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Selling off certain assets such as a manufacturing plant, a division or subsidiary, or product line; sometimes described as the opposite of capital expenditures
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Structural Unemployment
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Unemployment that occurs when workers' skills do not match the jobs that are available
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There is no change capital stock
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If gross Investment and depreciation are the same, then
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There is a gain in capital stock
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If gross investment is larger than depreciation, then
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There is a loss in capital stock
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If gross Investment is smaller than depreciation, then
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Durable goods, non-durable goods, services
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Consumption includes:
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Expenditure Approach
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A method of computing GDP that measures the total amount spent on all final goods and services during a given period
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Income Approach
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A method used to calculate GDP by summing up all incomes received by factors of production
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(Price of goods that year/price of goods in the base year)* 100
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CPI =
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(year 2CPI - Year 1CPI/ year1CPI)* 100
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Inflation Rate =
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(percentage change in nominal income) -(the inflation rate)
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Percent Change in Real Income =
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(year 2 value - year 1 value/year 1 value)* 100
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Annual Percent Change =
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(nominal GDP/real GDP) x 100
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GDP Deflator =
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Real GDP that year/ population that year
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Real GDP Per Capita =
