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22 Cards in this Set
- Front
- Back
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what is GDP?
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- the market value of the final goods and services produced during a given period
- add up the selling price of everything |
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what is included in GDP?
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- only goods and services produced within the borders of a country.
- even foreign companies that produce in the US |
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GDP Calculation - Value-Added Method
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- add up the selling price of an intermediary firm's product and subtract the costs of inputs purchased from other firms
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GDP Calculation - Expenditure Method
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consumption expenditure + investments + government purchases + net exports
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what is consumption expenditure?
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spending by households on durable goods (cars and furniture), nondurable goods (food and clothing), and services (legal, financial, and educational)
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what are investments?
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spending by firms on capital goods (machinery, factories, offices), residential investments (construction of NEW homes and apartment buildings), and inventory purchases
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what are government purchases?
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final goods by governments
only includes payment in exchange for goods; transfer payments are NOT included |
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what are net exports?
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exports minus imports
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what are some factors excluded from real GDP?
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leisure time, environmental quality, volunteering
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what is the criteria for an employed person?
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1.) 16 years or older
2.) worked full time or part time during the preceding week |
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what is the criteria for an unemployed person?
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1.) 16 years or older
2.) did not work in the week preceding, but did try to find work in the past 4 weeks |
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what is the criteria for a person out of the workforce?
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they must be retired, under the age of 16, or not looking for work
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unemployment spell
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a period in which someone has been continuously unemployed
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duration
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the length of time that someone has been under an unemployment spell aka the amount of time that someone has been unemployed
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what is the labor force?
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the total # of employed and unemployed people
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what is the unemployment rate?
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# of unemployed/labor force
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what is the participation rate?
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labor force/working age population
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what are some criticisms of the accuracy of the unemployment rate?
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1.) discouraged workers should be included as unemployed rather than out of the labor force
2.) involuntary part-time workers should not be included as employed, but as partially unemployed |
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what are discouraged workers?
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they would like a job, but have not made an effort to find one in the past 4 weeks
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what are involuntary workers?
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they are classified as being employed, but they are only working part time when they would like to work full time
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what are the short-term unemployed?
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people who are only temporarily out of a job, but find one soon
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what are the chronically unemployed?
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workers who are in an out of a job; short, but frequent unemployment spells
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