ECON212 Quiz 2
Economics 212 with Cotton at University of Miami
About this deck
By: Ka Ki Lai
Textbook:
Principles of Macroeconomics (7th Edition) (Case/Fair Economics 7e Series)
Created: 2011-03-29
Size: 9 flashcards
Views: 15
Textbook:
Principles of Macroeconomics (7th Edition) (Case/Fair Economics 7e Series)Created: 2011-03-29
Size: 9 flashcards
Views: 15
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Gross Domestic Product (GDP)
is the market value of all final goods and services produced within a country in a given period of time.
It measures 1) the total income of everyone in the economy, 2) total expenditure on the economy's output of goods and services.
GDP formula
GDP is the total spending
GDP (Y) = C + I + G + NX
C = Consumption, the total spending by households on goods/services
I = Investment, the total spending on goods that will be used in the future to produce more goods, including capital equipments (machinery), structures (factories) , inventories (goods produced but not yet sold)
G = Government Purchases, is all spending on the g&s purchased by govt at the feferal, state, and local levels
NX = Net Exports, Exports - Imports
Nominal GDP
values output using current prices, including the increase price under inflation. (NOT corrected for inflation)
The change in nominal GDP reflects both prices and quantities.
Real GDP
values output using the prices of a base year. (Corrected for inflation)
The change in real GDP is the amount that GDP would change if prices were constant (i.e zero inflation)
GDP Deflator
is a measure for the overall level of prices
GDP Deflator = 100 x (Nominal GDP/Real GDP)
Inflation Rate
the percentage increase in the GDP deflator from one year to the next
Real GDP per capita
is the main indicator of the average person's standard of living
GDP Doesn't value...
1) the quality of the environment
2) leisure time
3) non-market activity, e.g Child care, a parent provides his/her child at home
4) an equitable distribution of income
GDP is important because....
1) having large GDP enables a country to afford better schools, a cleaner environment, health care etc.
2) many indicators of the quality of life are positively corrected with Real GDP. E.g. Life Expectancy, Literacy, Internet usage.
About this deck
By: Ka Ki Lai
Textbook: Principles of Macroeconomics (7th Edition) (Case/Fair Economics 7e Series)
Created: 2011-03-29
Size: 9 flashcards
Views: 15
Textbook:
Principles of Macroeconomics (7th Edition) (Case/Fair Economics 7e Series)Created: 2011-03-29
Size: 9 flashcards
Views: 15
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 used this website for three exams, and I see a huge difference in my test results.”
Naj
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