Real GDP

All items and services manufactured in the boarders of a country

C (consumption) + I (business investment) + G (government spending) + Xn (net exports=exports-imports)

the overall health of the economy, positive GDP growth means economic growth

does not account for goods sold on the black market, garage sales, second hand car sales

Counting item twice for GDP (economics only count the final good like a pizza, not all the individual ingredients)

Durable are goods that last a long time, more than five years (appliances), non-durable goods are goods that don't last long (food, clothes)

Real GDP is GDP prices fixed to a base year and used to make year to year comparisons, Nominal GDP is GDP in current year prices.

is a market basket of prices for commonly used items

Gross National Product take into account all items produced by individuals of a country no matter where the item is physically produced

a graph that measures economic performance. macroeconomics period of expansion followed by a period of contraction

growth in GDP. measured by a rise in real GDP economic growth is a steady long-term rise in real GDP

a decline in GDP. following the peak, economy enters a period of contraction, an economic declining marked by a fall in real GDP

Top of the growth in GDP. when real GDP stops rising. the economy has reached its peak the height of its economic expansion

bottom of the decline in GDP. lowest point of economic decline, when real GDP stops falling

Unemployment that occurs when people take time to find a job (1st time job seekers after college).

unemployment that occurs as a result of harvest schedules or vacations (life guard).

unemployment that rises during economic downturns and falls when the economic improves. during a recession or depression

Unemployment that occurs when worker's skills do not match the jobs that are available. development of new technology, discovery of new resources, changes in consumer demand, globalization, lack of education.

a prolong contraction in the business cycle

a longer and more server recession

high unemployment and high inflation (1970's OPEC embargo on US)

prices rising (okay is controlled to 1%-3% per year)

prices lowering (not good, usually a signal that there is an economic downturn)

quickly rising and uncontrolled rising of prices.

a. People where buying goods on credit and going into debt b. Over supply of goods to buy c. People thinking the stock market would continue to increase and made bad and risky investments

a. People where buying goods on credit and going into debt b. People bought houses that could not afford c. Over supply of goods to buy d. People thinking the value of their house would increase e. People thinking the value to the stock market would increase, making bad investments

secretary of the treasury

chairman of the federal reserve

chair of federal reserve of new York

mortgage company

affects the overall market

inflow of cash, stock or even debt into a company

risk that a party to a truncation has not entered into contraction in good faith, has providing misleading

sept 15, 2008, Lehman brothers feud for bankruptcy largest filing bankruptcy in history

nationalized bailed out by government both mortgage companies

major movement. $1 trillion assets. on sept 16, the federal reserve bank of NY stepped in with a $85 billion loan to keep falling company from going under.

mortgage with a high interest rate

rack aging= putting mortgages together sold them like stocks/investments

expenditures exceed revenue

revenues exceed expenditures

factors of production

produce

market for goods and services; households are the buyers and firms are the sellers

households are sellers, and the firms are buyers

land, labor, capital

outer loop (monetary)

which is a group of sellers that attempts to thwart competition and reduce production in order to raise prices

September 3rd. dow jones reached a peak and then stock prices began to fall. prices fell so much the investors raced to get what was left of their money out of the tock market

congress passed the banking act of 1933 which created it. FDIC to insure deposits. this meant that even in a bank failed, deposits would be guaranteed by the federal government

true

zero unemployment is not an achievable goal in a market economy. the level of employment reached when there is no cyclical unemployment

the value or how much every good in the market cost all together

this includes all items produced in the economy and sold legally in markets

all inputs by itself are not part of GDP. GDP includes the value of final goods

includes books, clothes, cars, food, and includes services like haircuts housecleaning, doctor visits

this only includes goods and services currently produced.

when anybody wether American or not produces a good or service in the united states the value of that good or service is included in the GDP of the United states. but when an American produces a good or service in another country, then it is not counted as a part of GDP

usually the interval of time of which GDP is measured is either a year or a quarter year

goods that last for a relatively long time... cars, refrigerator

goods that last a short period of time... food, clothing

GDP formula

business good and services.

includes spending on goods and services by local , state, and federal governments

equal the purchase of domestically produced goods by foreigners minus the domestic purchases of foreign goods

gross national product

the annual income earned by U.S. owned firms and U.S. citizens

market value of all goods and services produced by Americans in one year

net national product, national income, personal income, disposable income

preventing problems

the production of goods and services valued at a constant price.

the production of goods and services valued at current price

consumer price index

computed each month by bureau of labor statistics. determined by measuring the price of a standard group of goods meant to represent the "market basket" of typical urban consumers

quantity theory, demand-pull theory, cost-push theory

too much money in the economy

more demand than supply and producers raise prices to lower the demand

producers raise prices in order to meet increased costs of inputs

this is the amount of goods and services in the economy that will be purchased at all possible price levels

revenues are equal to spending. there is the same amount of money going into the us treasury as coming out. taxes= government spending

a shortfall of tax revenue from government spending. the government is spending more money then it is receiving from taxes. taxes < government spending

create money, borrow money

the income, property, good, or services that is subject to a tax.

a tax for which the percentage of income paid in taxes remains the same for all levels of income

a tax for which the percentage of income paid in taxes increases as income increases

a smaller percentage of income is taken in taxes as income increases

A situation in which the government takes in more than it spends

A situation in which the government spends more than it takes in

A government bond that is repaid within three months to a year

A government bond that is repaid within two to ten years

A government bond that is repaid within two to ten years

The loss of funds for private investment due to government borrowing

A plan for the federal governments revenues and spending for the coming year

Budget in which revenues are equal to spending

A twelve month period that can begin on any date

The use of government spending and revenue collection to influence the economy