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- Mississippi
- University of Mississippi
- Economics
- Economics 203
- Holt
- Exam 1 review
Exam 1 review
Economics 203 with Holt at University of Mississippi
About this deck
By: Morgan Forehand
Created: 2012-04-29
Size: 27 flashcards
Views: 7
Created: 2012-04-29
Size: 27 flashcards
Views: 7
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what is GDP
- gross domestic product
- market valur of all final goods and services produced in a country during Period of time, typically one year
- measured in market values
- Only final goods(final users)
GDP calculations
Y=C+I+G+NX
4 major categories
- personal consumption
- gross private domestic investment
- government purchases
- Net exports
what does GDP not measure?
- no household production
- buying/selling goods illegal
- leasure not included
- not adjusted for crime
- doesnt matter how equal distribution of resources are divided up
Real GDP VS. Nominal GDP
- Real: value of final goods/services at base year prices
- bad: bc overtime,price change
- Nominal: value of final goods/services evaluated at current year pri
GDP deflator
nominal GDP/Real GDP x100
unemployment rate
- % of the labor force that is unemplyed
- #unemployed/labor force X 100
labor force
sum of unemployed and employed workers in the economy
labor force participation rate
% of working age population in labor force
# types of unemployment
1.) frictional
2.)structural
3.)cyclical
2.)structural
3.)cyclical
Frictional
- short term unemployment that arises from process of matching workers with jobs
- seasonally adjusted
- some unavoidable
- most are inbetween jobs(friction in between job 1 and job 2)
structural
-unemployement arising from persistant mismatch between the skills and attributes of workers and requirements of jobs
-longer term
-lacking basic skills, literacy, some addictions
-longer term
-lacking basic skills, literacy, some addictions
cyclical
-umemployment caused by business cycle recession
-usually rehire but get laid off first
-usually rehire but get laid off first
What causes unemployment
-governement policies
-unemployment insurances
-international comparison
-unemployment insurances
-international comparison
Inflation Rate
% increases in price level from one year to next
inflation cont.
changes in consumer price index
-AVG of prices of goods and services purchased by typical family of 4
-AVG of prices of goods and services purchased by typical family of 4
Consumer Price Index
-measurement of inflation
-track state of economy
-businesses use it to set prices
-track state of economy
-businesses use it to set prices
4 biases that cause change in CPI
1.) substitution
2.)increase in quantity
3.)new product
4.)outlet
2.)increase in quantity
3.)new product
4.)outlet
Producer Price Index
-AVG of prices recieved by producers of goods and services at all stages of the production process
-Trackes prices of market basket of goods
-prices firms recieve for goods and services at all stages of production
-Trackes prices of market basket of goods
-prices firms recieve for goods and services at all stages of production
Real Vs. Nominal Interest rate
-Real: stated interest rate on a loan; corrects nominal for effect of inflation on purchasing power
-Nominal: stated interest rate on a loan
-Nominal: stated interest rate on a loan
Cost of Inflation
-affects distrubution of income
-anticipated inflation
-unanticipated inflation
-anticipated inflation
-unanticipated inflation
II=P2-p1/P1
-prices goes up, inflation goes up, nominal interest up
ceteris paribus
assumption used in economics. where other revelant factors or variabls held constant
suppose war broke out in the middle east... what should we expect in the market for oil?
the market price of oil to rise and the market quantity to fall
inflation can best be described as....
the gradual rise of prices in an economy overtime
suppose a home buyeer purchases a house with a mortgage.. what process can be described as this:
Leverage
a worker quits his job in Oxford and prepares to take a job acrosss the country in Seattle, but he needs two weeks to move his family from one location to another.. What type of unemployment is this?
Frictional
About this deck
By: Morgan Forehand
Created: 2012-04-29
Size: 27 flashcards
Views: 7
Created: 2012-04-29
Size: 27 flashcards
Views: 7
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy