1892362
Description
Flashcards by Jay-Ar Prado, updated more than 1 year ago
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Created by Jay-Ar Prado
about 9 years ago
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| Question | Answer |
| Microeconomics 23 | is the study of how individual households and firms make decisions and how they interact with one another in markets |
| Macroeconomics 23 | is the study of the economy as a whole |
| Gross Domestic Product (GDP) 23 | is a measure of the income and expenditures of an economy is the market value of all final goods and services produced within a country in a given period of time |
| GDP (Y) = ? 23 | Consumption (C) + Investment (I) + Government Purchases (G) + Net Exports (NX) Y = C + I + G + NX |
| Consumption 23 | is the spending by households on goods and services, with the exception of purchases of new housing |
| Investment 23 | is the spending on capital equipment, inventories, and structures, including new housing |
| Government Purchases 23 | is the spending on goods and services by local, state, and federal governments does not include transfer payments because they are not made in exchange for currently produced goods or services |
| Net Exports 23 | exports minus imports |
| Nominal GDP 23 | values the production of goods and services at current prices |
| Real GDP 23 | values the production of goods and services at constant prices |
| GDP Deflator 23 | is a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100 it tells us the rise in nominal GDP that is attributable to a rise in prices rather than a rise in the quantities produced |
| GDP and Economic Well-Being 23 | — is the best single measure of economic well-being of a society — GDP per person tells the income and expenditure of the average person in the economy — higher GDP per person indicates a higher standard of living — is not a perfect measure of happiness or quality of life, however |
| Inflation 24 | refers to a situation in which the economy's overall price level is rising |
| Consumer Price Index (CPI) 24 | is a measure of the overall cost of the goods and services bought by a typical consumer is used to monitor changes in the cost of living over time |
| Inflation Rate 24 | is the percentage change in the price level from the previous period IR2 = (CPI2 - CPI1)/CPI1 * 100 |
| Substitution Bias 24 | the basket does not change to reflect consumer reaction to changes in relative prices |
| Introduction of New Goods 24 | the basket does not reflect the change in purchasing power brought on by the introduction of new products |
| Unmeasured Quality Changes 24 | if the quality of a good rises from one year to the next, the value of a dollar rises, even if the price of the good stays the same if the quality of a good falls from one year to the next, the value of a dollar falls, even if the price of the good stays the same. |
| Producer Price Index 24 | measures the cost of a basket of goods and services bought by firms rather than consumers |
| Indexed 24 | when some dollar amount is automatically corrected for inflation by law or contract, the amount is indexed for inflation |
| Nominal Interest Rate 24 | is the interest rate usually reported and not corrected for inflation |
| Real Interest Rate 24 | is the nominal interest rate that is corrected for the effects of inflation |
| Productivity 25 | refers to the amount of goods and services produced for each hour of a worker's time |
| Compounding 25 | refers to the accumulation of growth over a period of time |
| Factors of Production 25 | the inputs used to produce goods and services — physical capital, human capital, natural resources, technological knowledge |
| Physical Capital 25 | is a produced factor of production is the stock of equipment and structures that are used to produce goods and services |
| Human Capital 25 | the economist's term for the knowledge and skills that workers acquire through education, training, and experience |
| Natural Resources 25 | inputs used in production that are provided by nature, such as land, rivers, and mineral deposits — renewable (e.g. trees and forests) and nonrenewable resources (petroleum and coal) |
| Technological Knowledge 25 | society's understanding of the best ways to produce goods and services |
| Diminishing Returns 25 | as the stock of capital rises, the extra output produced from an additional unit of capital falls |
| Catch-up Effect 25 | refers to the property whereby countries that start off poor tend to grow more rapidly than countries that start off rich |
| Foreign Direct Investment 25 | Capital investment owned and operated by a foreign entity |
| Foreign Portfolio Investment 25 | Investments financed with foreign money but by operated by domestic residents |
| Brain Drain 25 | the emigration of many of the most highly educated workers to rich countries |
| Property Rights 25 | refer to the ability of people to exercise authority over the resources they own |
| Inward-orientated and Outward-orientated Trade Policies | inward — avoiding interaction with other countries outward — encouraging interaction with other countries |
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