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47 Cards in this Set
- Front
- Back
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Spending approach |
C + I + G + NX |
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Deflators |
(nominal / real ) x 100 |
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Inflation |
Percent change of CPI |
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Three ways to measure GDP |
Spending approach , income and production approach |
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Working pop formula |
LF / LF participation rate |
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Unemployment rate |
Unemployment x employed / 1 - employment rate |
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Consumption |
Spending on households goods and services |
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Investment |
Spending on firms for new factories equipment and machinery |
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Transfer payments |
Payments by the government to individuals for which the government does not recieve a new good or service in return |
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Net exports |
Exports minus imports |
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What goes Into consumption |
Durable and non-durable and services |
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What goes into investments |
Business fixed residential construction and change in business inventory |
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What goes into govt purchases |
Federal state and local |
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T |
B |
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National saving |
Income minus consumption minus govt purchases |
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Saving rate |
Saving divided by income |
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S national equals |
S private plus s public |
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S national |
Y minus C minus G |
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S private |
Y plus TR minus C minus T |
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S public |
T minus G minus TR |
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Components of aggregate income |
Labor and capital income depreciation idrirect business taxes net income forgeigners |
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Real rate of change |
Nominal rate minus inflation rate |
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Law of demand |
When price of product falls the quantity demanded increases |
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What determines quantity demanded? |
Price |
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Factors that shift the curve |
Taste, number of buyers, income , prices of related goods , consumer expectations |
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What causes a movement in demand curve |
The price |
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Law of supple |
Increases in supply increases the quantity supplied |
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Vertical interpretation of supply curve |
Shows the marginal cost for producing each unit |
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Shifts of supple curve |
Change in resource prices, technology, taxes and subsidies, prices of other goods, producer expectations , number of supplies |
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What helps markets succeed |
Property rights |
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Non rival |
Use by others does not reduce it's availability to others |
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Non excludable |
Impossible to exclude anyone access to it |
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User fee |
Fee of a good charged by the govt |
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Good that produce negative externalities should be ____ |
Taxed |
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Goods that produce positive externalities should be _____ |
Subsidized |
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Merit goods |
Should be available to everyone independently of their own ability to pay |
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Sources of market failure |
External costs or benefits , assymetric info, limited competition |
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Possible solutions for market failure |
Regulation taxation and compensation |
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Marginal private cost |
Cost of production viewed by a firm |
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Marginal social cost |
Costs viewed by society as a whole |
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Marignal benefit is demand |
B |
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Marginal social cost is supplied |
H |
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Deadweight loss occurs in negative externalities |
H |
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Marginal private benefit |
Additional benefit from consuming a good from the view point of a private individual |
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Dead weight loss occurs in postice externality as well |
H |
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Falling interests rates are good for bond holders if you want to sell |
H |
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Rising interest rates are bad for bond holders if you want to sell |
H |
