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| 13778160753 | Gross Domestic Product | The dollar value of all final goods and services produced within a country's borders in one year Most important measure of economic growth | 0 | |
| 13778160754 | GDP Per Capita | GDP divided by the population. It identifies on average how many products each person makes Best measure of standard of living | 1 | |
| 13778160755 | Expenditures Approach | Add up all the spending on final goods and services produced in a given year | 2 | |
| 13778160756 | Income Approach | Add up all the income that resulted from selling all final goods and services produced in a given year -- Labor Income/Rental Income/Interest Income/Profit | 3 | |
| 13778160757 | Nominal GDP | GDP measured in current prices. It doesn't account for inflation from year to year. | 4 | |
| 13778160758 | Real GDP | GDP expressed in constant or unchanging dollars -- adjusts for inflation Best measure of economic growth | 5 | |
| 13778160791 | The Business Cycle |  | 6 | |
| 13778160759 | Three Major Economic Goals for Every Country | 1. Promote economic growth 2. Limit unemployment 3. Keep prices stable (limit inflation) | 7 | |
| 13778160760 | What is the formula to calculate the percent change in GDP? | (year 2 - year 1)/year 1 x 100 | 8 | |
| 13778160762 | What is NOT included in GDP? | -Intermediate goods (goods inside final goods) -Non production transactions (stocks, bonds, real estate) -Non market/illegal activities (household production) | 9 | |
| 13778160763 | Four components of GDP | 1. Consumer Spending 2. Investment (business spending on tools/equipment 3. Government spending (NOT transfer payments) 4. Net exports -- exports (x) - Imports (M) | 10 | |
| 13778160764 | GDP = ? | C + I + G + Xn | 11 | |
| 13778160765 | Income approach adds up | 1. Labor income 2. Rental income 3. Interest income 4. Profit Factor payments | 12 | |
| 13778160766 | Unemployment | Workers that are actively looking for a job but currently aren't working | 13 | |
| 13778160767 | Frictional Unemployment | Temporary unemployment or being between jobs Individuals are qualified workers with transferable skills | 14 | |
| 13778160768 | Structural Unemployment | Changes in labor force make some skills obsolete Workers DO NOT have transferable skills and these jobs won't come back Permanent loss of jobs = creative destruction Workers must learn new skills | 15 | |
| 13778160769 | Cyclical Unemployment | Unemployment caused by a recession As demand for goods/services falls, demand for labor falls and workers are fired "Demand deficient unemployment" | 16 | |
| 13778160770 | How do you calculate the unemployment rate? | Percent of people unemployed (# unemployed)/(# in labor force) x 100 | 17 | |
| 13778160771 | Who is in the labor force? | -Above 16 years -Able/willing to work -Not institutionalized (jail/hospital) -Not in military, in school full time, or retired | 18 | |
| 13778160772 | Why is zero percent unemployment not our goal? | Frictional/structural unemployment are present always because people will always be between jobs or replaced by technology | 19 | |
| 13778160774 | Natural Rate of Unemployment (NRU) | Frictional + structural unemployment The amount of employment that exists when the economy is healthy and growing | 20 | |
| 13778160775 | Full Employment Output (Y) | The Real GDP created when there is no cyclical unemployment | 21 | |
| 13778160776 | Labor Force Participation Rate | Percent of population in the labor force. If people leave the labor force, the unemployment rate falls | 22 | |
| 13778160777 | Discouraged Workers | Some people are no longer looking for a job because they have given up | 23 | |
| 13778160778 | Inflation | The rising in the general level of prices and it reduces the "purchasing power" of money | 24 | |
| 13778160779 | Nominal Wage | Wage measured by dollars rather than in purchasing power | 25 | |
| 13778160780 | Real Wage | Wage adjusted for inflation Inflation -- workers have to ask their boss for a raise | 26 | |
| 13778160781 | Who is hurt by unanticipated inflation? | -Lenders (people who lend money at fixed interest rates) -People with fixed incomes -Savers | 27 | |
| 13778160782 | Who is helped by unanticipated inflation? | -Borrowers (people who borrow money) -A business where the price of the product increases faster than the price of resources | 28 | |
| 13778160783 | Inflation Rate | The percent change in prices from year to year Can use CPI to calculate this | 29 | |
| 13778160784 | Price Indices | Index numbers assigned to each year that show how prices have changed relative to a specific base year (base year given 100) | 30 | |
| 13778160785 | How do you calculate the inflation rate? | % change in prices = (year 2 - year 1)/(year 1) x 100 | 31 | |
| 13778160786 | Problems with the CPI | 1. Substitution bias 2. New products 3. Product quality | 32 | |
| 13778160787 | How do you calculate the GDP Price Index (Deflator)? | (Nominal GDP)/(Real GDP) x 100 | 33 | |
| 13778160788 | Causes of Inflation | 1. The government prints too much money ---If the government keeps printing money to pay off debts they could end up with hyperinflation 2. Demand - Pull Inflation: Demand pulls up prices -- overheated economy with excessive spending but the same goods 3. Cost - Push Inflation: Higher production costs increase Prices | 34 | |
| 13778160789 | Real Interest Rates | Percentage increase in purchasing power that a borrower pays Real = Nominal - Inflation | 35 | |
| 13778160790 | Nominal Interest Rates | Percent increase in money that a borrower pays not adjusting for inflation | 36 | |
| 13778202457 | Underemployed Workers | Someone who wants more hours but can't get them is still considered employed | 37 |
