Macro Exam 2 vocab n’ stuff

The value of final g/s evaluated at current year prices.

The value of final g/s valued at base year prices

Real GDP using chain weights

Larger than nominal GDP in years before the base year

Nominal GDP is larger than real GDP in years after the base year

A measure of the average prices of goods and services in the economy

A measure of the price level , calculated by dividing nominal GDP by real GDP and multiplying by 100. (nGDP/rGDP) x 100

Prices have decreased 2% between the base year and 2012

The process by which rising productivity increases the standard of living

The quantity of g/s that can be produced by one worker or by one hour of work

Manufactured goods that are used to produce other g/s

Someone who operates a business, bringing together factors of production to produce g/s, they also take risks

An economy in which the government decides how economic resources will be allocated

The level of real GDP attained when all firms are producing at capacity

Alternating periods of economic expansion and economic recession?

No, GDP for 2019 includes only production that occurs in 2019.

Yes

Consumption, Investment, government purchases, and net exports. (CIGE)

Wages, interest, rent, and profit. (WIRP)

The prediction that the level of GDP per capita in poor countries will grow faster than in rich countries.

The ability of a government to enforce the laws of the country.

The purchase or building of a facility by a corporation, in a foreign country.

The purchase by an individual or a firm of stocks or bonds issued in another country.

The process of countries becoming more open to foreign trade and investment.

False

The migration of highly educated and successful individuals from developing countries to high income countries.

They allow firms to deduct rom their taxes some fraction of the funds they have spent on investment.

In government statistics, someone who currently has a job or who is temporarily away from is or her job.

In government statistics, someone who is not currently at work but who is available for work and who has actively looked for work during this previous month.

The sum of employed and unemployed workers in the economy.

The percentage of the labor force that is unemployed. (Number of unemployed / Labor force x 100 = Unemployment rate.)

People who are available for work but have not looked for a job during the previous month because they believe no jobs are available for them.

The percentage of the working age population in the labor force. (Labor Force / Working age population x 100 = Labor force participation rate.)

The percentage of the working-age population that is employed. (Employment / Working-age population x 100 = Employment population ratio.)

The unemployment rate rises during recessions, falls during expansions, and is always above zero.

Short-term unemployment that arises from the process of matching workers with jobs.

Unemployment that arises from a persistent mismatch between the skills or attributes of workers and the requirements for jobs.

Unemployment caused by a business cycle recession

The normal rate of unemployment consisting of frictional unemployment and structural unemployment.

The quantity of capital per hour worked and the level of technology.

Capital, labor productivity, and technology.

New software developments, private property rights, investment in capital, and entrepreneurship.

70 years

10 years

An above market wage that a firm pays to increase workers' productivity.

The percentage increase in price level from one year to the next?

A measure in the average change over time in the prices a typical urban family of four pays for the g/s they purchase. (measures changes in the cost of living)

An average of the prices received by producers of g/s at all stages of the production process.

(Expenditures in year n / Expenditures in base year) x 100 = CPI

Housing, transportation, and food.

Value of dollars in year n = (CPI in year n / CPI in base year) x Value of dollars in base year.

The nominal interest rate minus the inflation rate.

The stated interest rate on a loan.

the nominal interest rate is always higher than the real interest rate, and the real interest rate may be positive or negative.

A decline in price level.

The costs to firms of changing prices.

Markets where financial securities such as stocks and bonds are bought and sold.

Firms such as banks, mutual funds, and pension funds, and insurance companies that borrow funds from savers to lend them to borrowers.

The system of financial markets and financial intermediaries through which firms acquire funds from households.

The interaction of borrowers and lenders that determines the market interest rate and the quantity of loanable funds exchanged.

A decline in private expenditures as a result of an increase in government purchase.

Number of employed / % of people employed ie. 154,430 / .959 = 160,032

When all remaining unemployment is either frictional or structural, the natural rate of unemployment prevails, and the unemployment rate is greater than zero.

The minimum wage law has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage.

An efficiency wage increases the unemployment rate since firms pay a higher than market wage that increases the quantity of labor supplied.

Deflation is defined as a negative inflation rate.

False

A borrower will lose and a lender will gain, because the value of the dollar is not a low as expected.

The real interest rate exceeds the nominal interest rate, and the cost of borrowing increases.

Consumption + Investment + Government Purchases + Net Exports = GDP. (GDP = C + I + G + NX)

70 / growth rate