1.
2 limits of GDP concept: Social welfare isn't measured
Nonmarket activites not counted
does not reflect losses or societal ills
don't measure pollution
distributive policies
underground economy
2.
3 things macroeconomics focus on: Determinants of total national income.
Aggregates of consumption and investment
Overall level of prices
3.
3 things that equal each other: expenditures=income=output
4.
Aggregate Behavior: the behavior of all households and firms together
5.
aggregate output: total quantity of goods and services produced in an economy in a given period
6.
base year: year chosen for the weights in a fixed-weight procedure
7.
Can you re-create the circular flow diagram from scratch?: y/n?
8.
capital stock at the end of period is...: capital at the beginning+net investment
9.
compensation of employees: wages
salaries
various supplements
10.
contraction/slump: peak to trough during which employment and output fall
11.
corporate bonds: promissory notes issued by firms when they borrow money
12.
current dollars: current prices we pay for goods and services
13.
disposable personal income
after-tax income: personal income-personal income taxes
14.
dividends: portion of a firm's profits that the firm pays out each period to its shareholders
15.
do you know how to physically calculate (real GDP): y/n?
16.
expansion/boom: from trough to peak with increased output&employment
17.
expenditure approach: total amount spent on all final goods and services during a given period
18.
Expenditure approach formula: GDP=C+I+G+(EX-IM)
19.
fiscal policy: affects:
taxes
gov spending
20.
fixed-weight procedure: uses weights from a given base year
21.
GDP: the market value of all final goods and services produced within a given period of time by factors of production located within a country.
22.
GNI (gross national income): GNP converted to dollars using an average of currency exchange rates over several years adjusted for rates of inflation
23.
gnp: total market value of all final goods and services produced within a given period by factors of production owned by a country's citizens, regardless of where the output is produced
24.
If personal saving rate low...: households are spending a large amount relative to income
25.
in personal saving rate hight...: households spending cautiously
26.
income approach: measures income recieved by all factors of production in producing final goods and services
27.
indirect taxes minus subsides: sales taxes
customs duties
license fees
28.
inventories: goods that firms produce now but intend to sell later.
29.
monetary policy: Federal Reserve for
money quantity
(affects interest rates)
30.
national income: the total income earned by the factors of production owned by a country's citizens
31.
national income and product accounts: data collected and published by the government describing the various components of national income and output in the economy
32.
net investment: gross investment-depreciation
33.
NNP: gross national product-depreciation
34.
nominal GDP: gross domestic product measured in current dollars
35.
personal income: the total income of households
36.
personal saving: amount of disposable income left after personal spending
37.
personal saving rate: the percentage of disposable personal income that's saved.
38.
proprietor's income: income of unincorporated businesses
39.
Relationship between total production and total sales: GDP=Final sales+change in business inventories
40.
shares of stocks: financial instruments that give to the owner a share in the firm's ownership and therefore the right to share in the firm's profits
41.
stagflation: both high inflation and high unemployment
42.
statistical discrepancy: data measurement error
43.
Sticky prices: prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded
44.
surplus of government enterprises: income of government enterprises
45.
Three Market Arenas: goods and services
labor
money
46.
transfer payments: Cash payments made by the gov to people who don't supply good, services, or labor in exchange.
47.
treasury bonds
notes
bills: Promissory notes issued by the federal government when it borrows money
48.
weight: importance attached to an item within a group of items
49.
what is income: wages
rents
interests
profits
