ECON 2203 1st Edition Lecture 13KeyEquationsExamplesDefinitionsImportant InformationExam 1 covers Chapter 5, 6, 7, and 10 (part of)• 30 multiple choice questions. • A green scantron and a simple calculator • Date: Friday, Feb13, 11:30 am - 12:20 pm, North CLB 101 (in class and the same classroom) • Office hours in Week 5: Tue (Feb.10) 2-3pm, Wed (Feb.11) 3-5pm, Thu (Feb.12) 2-3pm, and byappointments. • Key points: The numbers given in brackets are corresponding sample questions. Key points without sample questions are still probably tested in the exam. Chapter 5 Measuring a Nation’s Income1. Microeconomics and Macroeconomics (1) 2. The definition of GDP: Income and Expenditure (2,3) 3. The measurement of GDP (4,5)a. Definition (“Market value”, “All”, “Final”, “Goods and Services”, “Produced”, “Within a country”, “In a given period of Time”)4. The components of GDP (6,7,8) a. Consumption b. Investmentc. c. Government Purchases (Government Expenditure) d. d. Net Exports (Exports – Imports)5. Real GDP, Nominal GDP, GDP deflator These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.a. Definitions (measure quantities, price, or both?) (10,11,12)b. How to calculate Nominal and Real GDP and GDP deflator? (9) 6. Limitations of GDP (13)a. What is excluded from GDP?Sample questions:____ 1. Which of the following questions is more likely to be studied by a micro economist than a macroeconomist?a) Why do national production and income increase in some periods and not in others? b) Why do prices in general rise by more in some countries than in others? c) How rapidly is GDP currently increasing? d) Why does the demand for ice-cream rise when there is a drop in the price of strawberries? ____ 2. GDP is defined as thea) Value of all goods and services produced within a country in a given period of timeb) Value of all final goods and services produced by the citizens of a country, regardless of where they are living, in a given period of time c) Value of all goods and services produced by the citizens of a country, regardless of where they are living, in a given period of timed) Value of all final goods and services produced within a country in a given period of timeChapter 5 1, 2: DDChapter 6 Measuring the Cost of Living1. The Consumer Price Indexa. Definition of CPI and Inflation (1,2)b. How to calculate CPI? (3,4) c. How to calculate Inflation rate using CPI? (5) d. Difference between CPI and GDP deflator (6,7) 2. Correcting variables for the effects of Inflation a. Dollar Figures (8)b. Real and Nominal Interest Rates i. Definitions (9) ii. Real Interest Rates = Nominal Interest Rates – Inflation Rate (12) iii. Calculation: Measure the purchasing power of money (10,11,12) Sample questions:____ 1. The CPI is a measure of the overall cost ofa) The inputs purchased by a typical producer. b) The goods and services produced in the economy. c) The goods and services purchased by a typical consumer. d) The stocks on the New York Stock Exchange. ____ 2. The term inflation is used to describe a situation in whicha) Stock-market prices are rising b) The overall level of prices in the economy is increasing c) Incomes in the economy are increasingd) The economy is growing rapidly Chapter 6 1,2: CBChapter 7 Production and Growth1. Economic Growth around the world (1,2,3) a. Real GDP per person measures living standardsb. Different countries have different living standards (Real GDP per person). c. Different countries have different economic growth rate (growth rate of real GDP per person). d. Growth rate of real GDP per person measures living standards progress.2. Productivity and its determinants a. Productivity (4) b. Four factors and definitions (5) 3. Public Policy and Economic Growth (8) a. Saving and Investment (Diminishing return, Catch-up effect) (6,7) b. Investment from abroad c. Trade: Inward-oriented and outward-oriented d. Property rights and Political Stability e. Effects of population growth: increase or decrease economic growth? Sample Questions:____ 1. A nation's standard of living is best measured by itsa) GDP deflator b) Real GDP per personc) CPI d) Nominal GDP per person ____ 2. The level of real GDP persona) and the growth rate of real GDP per person are similar across countriesb) is very similar across countries, but the growth rate of real GDP per person differs widelycross countriesc) differs widely across countries, but the growth rate of real GDP per person is similar across countriesd) and the growth rate of real GDP per person vary widely across countriesChapter 71,2: BDChapter 10 Unemployment1. How to measure unemployment? a. Definition of employed, unemployed, labor force, and not in labor force. (1) b. Calculation: unemployment rate, labor force, labor-force participation rate, adult population (2) c. Limitations to measure unemployment rate (3) Discouraged workers and involuntary part-time workers 2. Types of unemployment (4, 5) a. Definitions and differences3. Natural Rate of unemployment (6, 7) a. Actual unemployment rate= Frictional + Seasonal + Structural + Cyclical b. Natural rate of unemployment = Frictional + Seasonal + Structural c. Natural rate of unemployment means Zero Cyclical unemployment, or Full employment 4. Three Macroeconomic Goals Sample questions:____ 1. Who is included in the labor force by the Bureau of Labor Statistics?a) Gabe, who does not have a job, but is looking for workb) Marcus, a full-time student not looking for workc) Chris, a retired engineer not looking for other workd) None of the above is correct.____ 2. In 2009, based on concepts similar to those used to estimate U.S. employment figures, the Italian adult non- institutionalized population was 51.070 million, the labor force was 24.710million, and the number of people employed was 22.765 million. According to these numbers, the Italian labor-force participation rate and unemployment rate were abouta) 48.4% and 7.9%. b) 44.6% and 3.8% c) 48.4% and 3.8%. d) 44.6% and 7.9%Chapter 101,5: AAPrinciples of MacroeconomicsLecture Notes> VERY DETAILED> COLOR CODED> Easy to read> May include information that was stated directly from the teacher in class<p>Principles of Macroeconomics</p><p>Introduction to Macroeconomics</p><p>Hui