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ECON 4020 002 EXAM 1: Ch 1 & 2
ECON 4020 002/U of U/ Bilginsoy/ Spring 2008
19
Economics
Undergraduate 3
02/02/2008

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Cards

Term
Calculate net domestic national product (NDP)
Definition

NDP = GDP - depreciation

 

Term
Calculate national income (NI)
Definition
NI = NDP - indirect taxes + subsidies to enterprises
Term
Calculate personal income (PI)
Definition

PI = NI - SS contributions - net corporate income - net corporate taxes + transfers to households

(where transfers to households = transfers to households and enterprises - subsidies to enterprises) 

Term
Calculate personal disposable income (PDI)
Definition
PDI = PI - personal taxes - fines and fees
Term
Calculate consumption (C)
Definition
C = PDI - household savings
Term
Calculate government purchases
Definition

Government purchases = consolidated gov. purchases + gov. income - transfers

(where gov. income = taxes + ss contributions + fines and fees) 

Term
Calculate primary current account balance
Definition

Primary CA = GDP - absoption

(where absorption = C + I + G) 

Term
Calulate overall current account balance (CA)
Definition

CA = Primary current account surplus + surplus on net factor income + surplus on unrequited transfers

(Per in class notes: CA= X-Z= Y-A)??? 

Term
Calculate GDP deflator
Definition
(Nominal GDP/Real GDP)*100
Term
Calculate GDP
Definition
Y= C+S+T= C+I+G+(X-Z)
Term
Define recession
Definition
When output declines for 2 consecutive quarters or more.
Term
Define growth recession
Definition
When there is growth, but not enough to keep up with population. So unemployment increases.
Term
Define coordination failure
Definition
When markets don’t work (in the macro environment) i.e. when unemployment is high so firms produce less (and need less workers) because ppl are consuming less (b/c they don’t have a job).
Term
What is the difference between a flow variable and a stock variable?
Definition
Flow is measured over time (ex. hourly wage) and stock is measured at a point in time (ex. savings at a particular moment in time, national debt)
Term
Calculate "macro balances"
Definition
Macro balances: (S-I)+(T-G) = (X-Z)
Term
Calculate GDP gap
Definition
(Y-YP/YP)*100
Term
Calculate real GDP
Definition
Real GDP = (base year Q)(current year P) + (base year Q) + current year P)....
Term
Calculate CPI
Definition
CPI: (current year P)(base year Q) + (current year P + base year Q)...
Term
Calculate GDP delfator inflation
Definition
GDP deflator inflation = nominal GDP groth rate - real GDP growth rate
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