ECON 102: Exam 1
24 Cards in this Set
Front | Back |
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GDP
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everything PRODUCED w/in economy
-total market value of final goods & services produced w/in economy in given year
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aggregate expenditures
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breakdown of production by types of agens (households, firms, government) that buy goods
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consumption expenditures
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purchases of newly produced goods & services by households (except housing)
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private investment expenditures
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purchases of newly produced goods & services by firms (including housing)
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transfer payments
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payments from gov to individuals that do not correspond to production of goods & services
-not included in GDP
-ex: welfare, unemployment, SS
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aggregate expenditure approach
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GDP divided among purchasers
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value added approach
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GDP divided among producers
-sum of all income generated by organization, regardless whether or not producing final good/service
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income distribution
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-3/4 households in top 5% have two income earners
-some of rise in household income distribution has to do w/ changing makeup of households & w/ changes in types of jobs held by women earners in some of those households
-much more of household income in top quintile comes from capital (…
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labor force
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total # workers, employed + unemployed
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unemployment rate
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percentage of labor force that's unemployed
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labor force participation rate
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percentage of population over 16 that's in labor force
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cyclical unemployment
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unemployment that occurs during fluctuations in real GDP
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frictional unemployment
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unemployment that occurs w/ normal workings of economy, workers taking time to search for suitable jobs & firms taking time to search for qualified employees
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structural unemployment
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unemployment that occurs when mismatch of skills & jobs
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natural rate unemployment
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level of unemployment at which there is NO cyclical unemployment (only frictional & structural)
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full employment
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level of unemployment that occurs when unemployment rate is at natural rate
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CPI
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price index, measures cost of fixed basket of goods over time; fixed basket chosen to represent consumption pattern of typical consumer in base year
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real wages
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wages/CPI
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problems w/ CPI
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-overestimates inflation bc of substitution bias (CPI assumes people buy same basket of goods as in base year but people substitute out goods whose prices have risen since base year)
-CPI worse estimate of cost of living farther away you get from base year
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stock of capital
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total of all machines, equipment & buildings in an entire economy
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rule of 70
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number will double in 70/x yeasrs, x is percentage rate of growth
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capital deepening
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increases in stock or quality of capital per worker
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technological progress
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more efficient ways or organizing economic affairs that allow an economy to increase output w/o increasing capital or labor inputs
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growth accounting
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method to determine contribution to economic growth from increased capital, labor & technological progress
-gov measures Y, K, L & backs out contribution for K assuming certain production function for GDP
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