AP Macro Unit 2 Student Notes
... 1) GDP is a monetary measure: the reason for this is so that we can compare apples and oranges. EX. If we produce 1000 C.D.'s 1200 paper back books this year and then next year produce 1000 paper back books and 1200 C.D.'s in which year was our GDP the highest? 2) intermediate goods: (goods and serv ...
... 1) GDP is a monetary measure: the reason for this is so that we can compare apples and oranges. EX. If we produce 1000 C.D.'s 1200 paper back books this year and then next year produce 1000 paper back books and 1200 C.D.'s in which year was our GDP the highest? 2) intermediate goods: (goods and serv ...
Economics 1012A Introduction to Macroeconomics Fall 2008 Dr. RE
... C) positive economics studies how the economy does in fact work, and normative economics studies what the goals of an economy should be. D) positive economics studies what will make society better off and normative economics studies what will make the normal or average individual better off. 2. Whic ...
... C) positive economics studies how the economy does in fact work, and normative economics studies what the goals of an economy should be. D) positive economics studies what will make society better off and normative economics studies what will make the normal or average individual better off. 2. Whic ...
Document
... Real GDP that is produced at the natural unemployment rate. (which we agree around 5%) ...
... Real GDP that is produced at the natural unemployment rate. (which we agree around 5%) ...
The AD-AS Model
... summarize the analysis of how the economy responds to recessionary and inflationary gaps, we can focus on the output gap Output Gap: the percentage difference between actual output and potential output o Measured as the percentage Y2 lies away from Y1 o Always trends towards zero Output gap = actu ...
... summarize the analysis of how the economy responds to recessionary and inflationary gaps, we can focus on the output gap Output Gap: the percentage difference between actual output and potential output o Measured as the percentage Y2 lies away from Y1 o Always trends towards zero Output gap = actu ...
ARE PRICES TOO STICKY? NATIONAL BUREAU OF ECONOMIC RESEARCH Cambridge, MA 02138
... costlessly adjust its price after the shock, or it can refuse to pay the menu cost, in which case it cannot change Its price regardless of the size of the ...
... costlessly adjust its price after the shock, or it can refuse to pay the menu cost, in which case it cannot change Its price regardless of the size of the ...
Chapter 35 PowerPoint Presentations
... Tax incentives to work Tax incentives to save and invest The Laffer curve ...
... Tax incentives to work Tax incentives to save and invest The Laffer curve ...
Marginal cost - is the change in total cost that arises
... defined period or point in time for a group of industries or products. They show the value for each item expressed in terms of the prices of that particular period or point in time to which they relate. Consumer Prices Index (CPI) – This is the headline UK domestic measure of inflation. It measures ...
... defined period or point in time for a group of industries or products. They show the value for each item expressed in terms of the prices of that particular period or point in time to which they relate. Consumer Prices Index (CPI) – This is the headline UK domestic measure of inflation. It measures ...
Deflating GDP “Deflating” Nominal Values GDP Price Deflator
... “Deflating” Nominal Values • Price Index: – Ratio of Prices “Now” vs. “Then” – “Now & Then” Arbitrarily Chosen – “Then” is the “Base Year” – “Base Base Year Year” Defines (Constant) Value of Dollar Defines (Constant) Value of Dollar ...
... “Deflating” Nominal Values • Price Index: – Ratio of Prices “Now” vs. “Then” – “Now & Then” Arbitrarily Chosen – “Then” is the “Base Year” – “Base Base Year Year” Defines (Constant) Value of Dollar Defines (Constant) Value of Dollar ...
chapter outline
... 1. When considering how price changes affect consumers’ well-being, it is important to measure changes in the quality of goods and services over time. 2. This is an article from the Wall Street Journal that discusses how the Bureau of Labor Statistics takes product improvements into account when com ...
... 1. When considering how price changes affect consumers’ well-being, it is important to measure changes in the quality of goods and services over time. 2. This is an article from the Wall Street Journal that discusses how the Bureau of Labor Statistics takes product improvements into account when com ...
Real Business Cycle Model
... – Determines the relationship between employed factors of production and total output. ...
... – Determines the relationship between employed factors of production and total output. ...
14.02 Principles of Macroeconomics Problem Set 1 *Solution*
... Autonomous spending is the part of demand for goods that does not depend on output. The multiplier tells us how much equilibrium output will change for a given change in autonomous spending. For example, if investment increases by 500, then the equilibrium output will rise by 1,000 (500 *2). Why? F ...
... Autonomous spending is the part of demand for goods that does not depend on output. The multiplier tells us how much equilibrium output will change for a given change in autonomous spending. For example, if investment increases by 500, then the equilibrium output will rise by 1,000 (500 *2). Why? F ...
KSE General Admission Test Example
... 3. (*) Consider a hypothetical economy with aggregate consumption C=300+0.3Y, aggregate investment I=200+0.2Y, government spending G=400 and Net Exports NX=600, where Y is the aggregate income. What is the level of aggregate investment in this economy? Explain. ...
... 3. (*) Consider a hypothetical economy with aggregate consumption C=300+0.3Y, aggregate investment I=200+0.2Y, government spending G=400 and Net Exports NX=600, where Y is the aggregate income. What is the level of aggregate investment in this economy? Explain. ...
Due Date: Thursday, September 8th (at the beginning of class)
... If society becomes more thrifty – meaning that for any given level of income people save more and consume less – then the planned-expenditure function shifts downward. Equilibrium income falls (by the way, how much does this income fall by? Ans: 1/(1-MPC) times the decline in a). b. What happens to ...
... If society becomes more thrifty – meaning that for any given level of income people save more and consume less – then the planned-expenditure function shifts downward. Equilibrium income falls (by the way, how much does this income fall by? Ans: 1/(1-MPC) times the decline in a). b. What happens to ...
Problem 1. Use the money market to explain the interest
... Answer 12: (a). Crowding out happens when government purchases increases the interest rate. The Federal Reserve could increase the money supply by buying bonds to bring the interest rate back down. Answer 13: (d). (Stolen from the textbook.) The primary argument against active monetary and fiscal po ...
... Answer 12: (a). Crowding out happens when government purchases increases the interest rate. The Federal Reserve could increase the money supply by buying bonds to bring the interest rate back down. Answer 13: (d). (Stolen from the textbook.) The primary argument against active monetary and fiscal po ...
Sample Exam 3 Questions
... c. shift the budget toward a deficit when the economy slows but shift it toward a surplus during an expansion. d. increase tax collections automatically during a recession. 14. Keynesian analysis implies that a planned expansion in the size of the budget deficit is a. always necessary to ensure full ...
... c. shift the budget toward a deficit when the economy slows but shift it toward a surplus during an expansion. d. increase tax collections automatically during a recession. 14. Keynesian analysis implies that a planned expansion in the size of the budget deficit is a. always necessary to ensure full ...
Chapter 24 - An Introduction to Macroeconomics
... rapidly. Indeed, it implies that the standard of living will double every 35 years. So if the average citizen of a country enjoying 2 percent growth begins this year with an income of $10,000, in 35 years that person will have an income of $20,000. And 35 years after that there will be another doubl ...
... rapidly. Indeed, it implies that the standard of living will double every 35 years. So if the average citizen of a country enjoying 2 percent growth begins this year with an income of $10,000, in 35 years that person will have an income of $20,000. And 35 years after that there will be another doubl ...
EC330 - The University of Reading
... Bulgaria, Latvia and – to a lesser extent Hungary – have however returned to a greater share of administered prices in later stages of the reform process. Such reversals, manifested clearly in the data, illustrate empirically our theoretical point in Lecture 6 about the political constraints induced ...
... Bulgaria, Latvia and – to a lesser extent Hungary – have however returned to a greater share of administered prices in later stages of the reform process. Such reversals, manifested clearly in the data, illustrate empirically our theoretical point in Lecture 6 about the political constraints induced ...
Practice Exam 2
... b. unless you shut down your operations this year, you will incur economic losses that exceed your fixed costs. c. you will incur economic losses this year, but those losses will be less than your fixed costs. d. if you want to minimize your losses this year, you'll continue operating your business, ...
... b. unless you shut down your operations this year, you will incur economic losses that exceed your fixed costs. c. you will incur economic losses this year, but those losses will be less than your fixed costs. d. if you want to minimize your losses this year, you'll continue operating your business, ...