Term
| How does NDP differ from GDP? |
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Definition
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Term
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Definition
| (X-M) or (Exports-Imports) |
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Term
| What adjustments need to be made to go from National Income (NI) to GDP? |
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Definition
| NI + IBT + CFC + NFFIEUS = GDP |
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Term
| How do you get Disposable Income (DI)? |
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Definition
Personal income less personal taxes. [ PI - PT = DI ] |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| NI - UCP - CIT + SSC = PI |
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Term
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Definition
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Term
| How is price index computed? |
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Definition
| (Market price of a particular year ÷ Market price of the base year) ×100 |
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Term
| What is the difference between nominal and real GDP? |
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Definition
| Nominal GDP is the actual dollar amount you have and is therefore, not adjusted. Real GDP is the purchasing power of the GDP and is therefore, adjusted according to the inflation/deflation rate. |
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Term
| How do you compute Nominal GDP? |
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Definition
| Units of output × price per unit |
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Term
| How do you compute Real GDP? |
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Definition
| (Nominal GDP × 100) ÷ price index |
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Term
| How do you compute the Output growth of an economy? |
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Definition
| Output growth = (real GDP of a particular year - real GDP of the base year) ÷ (real GDP of the base year) ×100 |
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Term
| How do you compute Real GDP per capita? |
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Definition
| Real GDP of a year ÷ population of that year |
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Term
| How do you compute the unemployment rate (UR)? |
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Definition
| (Number of unemployed ÷ labor force) × 100 |
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Term
| How do you compute the labor force participation rate (LEPR)? |
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Definition
| (# in labor force ÷ adult population) × 100 |
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Term
| How do you compute Consumer price index (CPI)? |
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Definition
| (Weighted cos of base-period items in current-year prices) ÷ (Weighted cost of base-period items in base-year prices) ×100 |
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Term
| What is the Consumer Price Index (CPI)? |
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Definition
| It meausre changes in the prices of goods and services commonly bought by consumers. The index is based on a market basket of approsimately 400 goods and services weighted according to how much the average consumer spent in teh base year. |
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Term
| How do you compute price change? |
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Definition
| (Change in CPI) ÷ (Beginning CPI) × 100 |
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Term
| What three important goals for the economy did the Employment Act of 1946 establish? |
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Definition
1. Full Employment
2. Price Stability
3. Economic Growth |
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Term
| What are the types of unemployment (5)? |
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Definition
1. Natural Level of Unemployment ( NRU or Full Employment): most individuals who are willing to work at the prevailing wages in teh economy are employed and the average price level is stable
2. Frictional Unemployment: workers changing jobs and new workers seeking their first jobs
3. Structural Unemployment: mismatch between the skills of the people seeking jobs and the skills required for available jobs.
4. Cyclical Unemployment: insufficient total spending
5. Seasonal Unemployment
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Term
| How do you know if prices are inflated or deflated? |
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Definition
Inflated: If price index is below 100
Deflated: If price index is above 100 |
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