Download Review Sheet for Unit IV Exam Ch. 12.1, 12.2, 12.3, 13.1, 13.2, 13.3

Review Sheet for Unit IV Exam
Ch. 12.1, 12.2, 12.3, 13.1, 13.2, 13.3 Exam
ABOUT THE NOTE CARDS: You are allowed – and encouraged – to create and use
a note card (one side) to help remember concepts. This must be hand-written
and completely original. Photocopies and/or computer printouts will not be
allowed. Do this by hand, and do your own work. Failure to follow these rules will
result in an immediate, and non-negotiable, failure (ZERO). ALL NOTECARDS
WILL BE COLLECTED AND STAPLED TO YOUR TEST.
CONCEPTS AND POLICIES: Be able to identify each of the following and explain their importance:
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Macroeconomics – what is it?
GDP – The measure of national output:
o What is included?
o What is left out?
 Intermediate goods
 Example
 Secondhand sales
 Example
 Nonmarket transactions
 Example
 Underground economy
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Current GDP vs. Real GDP
o Base year
o Real GDP
o Current GDP
o GDP Per Capita
Limitations of GDP
WORLD GDPs (Chart 323)
GNP – The measure of national income: - Know what each of these measures
o GNP
o NNP
o NI
o PI
o DPI
o The formulas from class I showed on the board. If you weren’t paying attention, look them
up.
Four Sectors of the economy (Pages 325-327)
o Consumer
o Investment
o Government
o Foreign
o (know the flow chart on 325)
Output-Expenditure Model (page 327)
o GDP= C+I+G+(eXports -iMports)
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Components?
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Population in US
o Census
o Urban population/rural population
o Geographic Center of Population in US
o Consequences of growth
o Infrastructure
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Population Trends
o Baby boom
o Population pyramid
o Demographer
o Fertility rate
o Life expectancy
o Net immigration
Poverty
o Poverty threshold
o Poverty guidelines
o The Lorenz Curve
Reasons for Income Inequality
o Education
o Wealth
o Tax Law Changes
o Decline of Unions
o More Service Jobs
o Monopoly Power
o Discrimination
o Changing Family Structure
Anti-Poverty Programs
o Welfare
o Income Assistance
o General Assistance
 Food stamps
 Medicaid
o Tax Credits
o Social Service Programs
o Enterprise Zones
o Workfare
o Negative Income Tax
Business Cycles
o Expansion
o Recession
o Depression
o Peak
o Trough
o Trend line
o Causes for business cycle (there are 4 reasons)
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The Great Depression
o Causes
o What was result?
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Forecasting of business cycles
o Leading economic indicator
o Composite index of leading economic indicators
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Unemployment
o State unemployment data
o World unemployment data
Measuring unemployment
o Who does the measuring?
o Who counts as unemployed?
o How is unemployment rate figured?
o Relationship between unemployment and economic recession
Limitations of Unemployment Rate
o Discouraged workers
o Underemployed
o Underground activity
o Caretakers / stay at home parents
o Who else?
Kinds of Unemployment
o Frictional
 Definition
 Examples
o Structural
 Definition
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Examples
o Seasonal
 Definition
 Examples
o Cyclical
 Definition
 Examples
o Technological
 Definition
 Examples
Prices and Inflation
o Price index
o CPI (how to calculate and definition)
o Market basket
o Base year
Inflation – How is it determined?
o Creeping inflation
o Stagflation
o Hyperinflation
 Real-life examples
o Implicit GDP price deflator (definition and how to use the formula)
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Causes of Inflation (365-367)
o Demand-Pull
o Cost-Push
 Wage-Price Spiral
o Excessive Monetary Growth
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Consequences of Inflation
o What does it mean to value of Dollar?
o Who does it hurt most?
o Influence on spending habits?
o Influence on distribution of income.