ECON 211 – Test 1 – Ch. 23 (APLIA) – Flashcards
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A circular-flow model.
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What is this called?
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Based on this model, firms earn revenue when households purchase goods and services in product markets.
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Based on this model, firms earn revenue when ________ purchase _________ in product markets.
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Based on this model, households earn revenue when firms purchase factors of production in product markets.
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Based on this model, households earn revenue when ________ purchase _________ in product markets.
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To avoid double counting, the value of resold items is not included in the GDP. In this example, the silver platter entered the GDP in the year in which it was originally manufactured.
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The Jones family buys an antique silver platter at an auction in upstate New York on March 22, 2015. Is this included in the 2015 GDP?
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Because Crunchy's uses the corn syrup that Graincorp produces in the production of cereal, the corn syrup is considered an intermediate good, not a final good and, therefore, does not directly increase the GDP of the United States. However, the price of the cereal will include the value of the corn syrup. Therefore, the market value of the corn syrup will enter GDP as part of the market value of the final good, the cereal.
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Graincorp, a U.S. agricultural company, produces corn syrup at a plant in Iowa on September 16, 2016. It sells the corn syrup to Crunchy's for use in the production of cereal that will be made in the United States in 2016. Is this included in the 2016 GDP?
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NX = exports (X) - imports (I)
NX= X - I
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The formula for net exports (NX) is...
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GDP = C + I + G + (X - M)
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The formula for GDP is...
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Consumption.
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(C) in GDP calculation stands for...
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Investment.
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(I) in GDP calculation stands for...
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Government Purchases.
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(G) in GDP calculation stands for...
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Exports.
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(X) in GDP calculation stands for...
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Imports.
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(M) in GDP calculation stands for...
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current
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Nominal GDP measures the value of current output using _______ prices.
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prices from a base year
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Real GDP measures the value of output in the current year using ___________.
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GDP deflator
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The __________ is a measure of the price level calculated by dividing nominal GDP by real GDP and multiplying by 100.
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Inflation Rate in 2010.
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100 x (GDP Defl 2010 - GDP Defl 2009)/GDP Defl 2009
