Intro to Macroeconomics Chapter 4

By felixthea, May 2007

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standard of living	- the degree to which people have access to goods and services
how is standard of living related to economic growth?	- the more we grow/produce, the more we can consume
what is economic growth?	- a STEADY increase in the quantity and quality of goods that an economy can produce
what is output per person?	- total output/# of people in an economy
what is average labor productivity?	- total output/# of workers
trade deficit	- exporting less than importing
trade surplus	- exporting more than importing
monetary policy	- determination of the money supply - controlled by Federal Reserve Bank
fiscal policy	- determines government's budget - controlled by the government
structural policy	- changes the underlying structure of an economy
what is the problem with aggregation?	- it obscures important details ex: it may say that the standard of living has improved, but that may be just for a certain small sector which affects the economy as a whole due to aggregation

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