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EC202 MIDTERM #1
Terms in this set (20)
In computing GDP, it is essential to
avoid double counting.
Gross domestic product is a measure of the total market value of all
final goods and services produced in an economy over a period of time.
The biases in the CPI include the
new goods, quality change, and substitution biases.
The working age population can be divided into two groups
people in the labor force and people who are not.
Macroeconomics differs from microeconomics in that:
macroeconomics focuses on the national economy and the global economy.
The labor force is defined as people
who have a job or are looking for a job.
The consumer price index (CPI)
compares the cost in the current period of basket goods typically consumed in the base period to the cost in a base period of that same basket of goods.
Positive and normative sentences differ in that
positive statements can be tested, whereas normative statements cannot.
One argument against unemployment insurance is that:
unemployment insurance creates an indirect incentive that can make it more attractive for workers to stay unemployed.
To calculate employment rate, which of the following are necessary pieces of info?
1. the number of unemployed persons. 2. the number of people in the labor force.
In the expenditures approach to GDP, the largest component for the US in recent decades has been
personal consumption expenditures.
The technique currently used to calculate the CPI implicitly assumes that over time consumers buy
the same relatives quantities of goods as in a base year.
An individual is structurally unemployed if
the individual lacks marketable job skills because technology has changed.
Which is included in the government expenditures component of the expenditure approach to GDP?
state government expenditures on local schools.
output and income are treated as essentially identical.
Holding all else constant, if people who had been discouraged workers decide to start looking for jobs again but haven't yet found them, you will see:
an increase the unemployment rate
How to find employment?
E= unemployment/unemplyment rate
E= " -unemployment
The value of a new 2016 Honda Civic produced in 2016 and purchased in 2017
raises overall GDP in 2016.
The investment spending category of GDP does NOT include:
purchases of stocks and bonds by institutional investors (like pension funds).
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