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GDP
AD/AD Graphs
Employment
Key terms Economics
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- $100 What is market value of all
officially recognized final goods and
services produced within a country in a
year, or other given period of time?
GDP
- $200 What is the equation for
GDP?
GDP= G+C+I+Xn
- $300 If a Farmer buys a used tractor
for his farm, would the purchase of the
tractor be included on the year’s GDP?
No, Only new products are
included in the GDP
- $400 How is real GDP
calculated?
Real GDP is calculated by adding all final
good and then dividing by CPI. Unlike the
nominal GDP, real GDP takes into
account inflation.
- $500 Define CPI and how is it
connected to GDP?
CPI is measures changes in the price
level of a market basket of consumer
goods and services purchased by
households. We use CPI in order to
calculate inflation and real GDP.
- $100 What are the shifters of
demand?
The shifters of demand are Change in
the price, Technology, Number of
sellers, Future price expectations,
Prices of related goods, and
Government restrictions.
- $200 What is the law of
demand?
As the price of a product increases,
quantity demanded lowers. Which
means they are inversely
proportional.
- $300 What is the law of supply?
An increase in price results in a
increase in quantity. In other words
they are directly proportional.
- $400 What is the difference
between aggregate demand/supply
and demand/supply?
Aggregate takes into account
all goods in an economy.
- $500 What is the difference
between Concave and convex on
an graph?
Concave is a surface that is
curved inward in the middle and
convex is a surface that is
curved outward.
- $100 What is point b?
Point b represents full
employment.
- $200 What is the difference
between SR and LR?
Short run is curve and Long run
is linear.
- $300 An increase in technology
would shift a production
possibility curve in what
direction?
This would shift the graph to
the right.
- $400 What causes movement
along a demand graph?
What causes movement along the
graph is A movement along the
demand curve is caused by a
change in price of the good or
service.
- $500 What causes equilibrium
and unemployment?
Equilibrium is when all
resources are being used
efficiently. Unemployment is
when there is not enough
work.
- $100 What is unemployment?
number of unemployed: the
number of people who are
unemployed in an area, often
given as a percentage of the total
labor force
- $200 What are the different
types of unemployment?
Cyclical Unemployment, Frictional
Unemployment, and Structural
Unemployment
- $300 What is stagflation?
Stagflation, stagnation and inflation, is a
term used in economics to describe a
situation where an inflation rate is high,
the economic growth rate slows down,
and unemployment remains steadily
high.
- $400 Describe the circular flow
model?
In economics, the terms circular flow of
income or circular flow refer to a simple
economic model which describes the
reciprocal circulation of income between
producers and consumers.
- $500 What counts as
unemployment?
People not looking for a job don’t
count as Unemployed. Neither do
people moving from job to job. Only
people that have been out of the job
for 3 months count.
- $100 What are normal goods?
In economics, normal goods are any
goods for which demand increases.
- $200 What is ppc/ppf?
Trade-offs facing an economy
that produces only two goods.
- $300 What is a GDP deflator?
For a given year is 100 times
the ratio of nominal GDP to
real GDP in that year?
- $400 What is scarcity?
Scarcity is the fundamental economic
problem of having seemingly unlimited
human wants and needs in a world of
limited resources.
- $500 What are intermidiate
Goods?
Goods and services brought from
one firm by another firm to be used
as inputs into productions.
- $100 Explain the difference
between Macro and micro
economies?
Macroeconomics is a branch of economics dealing
with the performance, structure, behavior, and
decision-making of an economy as a whole, rather
than individual markets. Microeconomics are is a
branch of economics that studies the behavior of
individual households and firms in making decisions
on the allocation of limited resources.
- $200 What are supply side
Economics?
Supply-side economics is a school of
macroeconomics that argues that economic
growth can be most effectively created by
lowering barriers for people to produce
(supply) goods and services,
- $300 Name the two type of
economic theories?
The two types of economic theories
are the classical and Keynesian.
- $400 What is closed economy?
An economy in which no activity is conducted
with outside economies. A closed economy is
self-sufficient, meaning that no imports are
brought in and no exports are sent out. The
goal is to provide consumers with everything
that they need from within the economy's
borders.
- $500 Explain the difference
between Command and market
economy?
A command economy is where the
government control the economy and
a market is where the market is free.
The U.S. is a market and China is a
command.