Macro Exam 2

Macro Exam 2 - Term Definition GDP market value of the...

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Term: GDP Definition: market value of the final goods and services produced within a country Term: Final good Definition: item that is bought by its final user during a specified time period Term: intermediate good Definition: item that is produced by one firm bought by another and used as a component of a final good Term: government expenditure Definition: governments buy goods and services from firms Term: net exports Definition: value of exports (X) minus the value of imports (M)
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Term: aggregate income = aggregate expenditure Definition: Y=C+I+G+X-M Term: gross investment Definition: total amount spent both buying new capital and replacing depreciated capital Term: net investment Definition: amount by which the value of capital increases Term: Expenditure Approach Definition: measures GDP as the sum of consumption C, investment I,, government expenditure of goods and services G and net exports of goods and services X-M Term: income approach Definition: measures GDP by summing the incomes that firms pay households for the factors of production they hire
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Term: real GDP Definition: value of final goods and services produced in a given year when valued at the prices of a reference base year Term: nominal GDP Definition: value of final goods and services produced in a given year valued at the prices of that year. Term: real GDP per person Definition: real GDP divided by the population Term: potential GDP Definition: when all the economy's labor capital land and entrepreneurial ability are fully employed Term: problems with unemployment Definition: lost production and incomes lost human capital
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Term: working age population Definition: is the total number of people aged 16 years and over who are not in jail hospital or some other form on institutional car Term: labor force Definition: sum of the employed and the unemployed Term: unemployment categories Definition: 1 without work but has made specific efforts to find a job within the previous four weeks 2 waiting to be called back to a job (laid off) 3 waiting to start a new job within 30 days Term: unemployment rate Definition: percentage of the people in the labor force who are unemployed unemployment rate= # of people unemployed/labor force
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Term: employment-to-population ratio Definition: percentages of people of working age who have jobs EPR=#of people employed/ working age pop. Term: labor force participation rate Definition: percentage of the working age pop who are members of the labor force LFPR= labor force/working age population Term: marginally attached worker Definition: currently neither working nor looking for work but has indicated that he or she wants and is available for a job Term: discouraged worker Definition: marginally attached worker who has stopped looking for a job because of repeated failure to find one Term: 3 unemployment sources Definition: 1 lose their jobs and search for another 2 leave their jobs and search for another 3 enter or re-enter the labor force to
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Term: frictional unemployment Definition:
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