Study_guide_1 - EC 302 Exam 1 Study Guide Topics to be...

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EC 302 Exam 1 Study Guide 1 Topics to be covered in Exam1 on Thursday, October 2. 1. Definitions and Measurements: Gross Domestic Product (GDP) Production Income Expenditure Inflation: π = (P 2 -P 1 )/P 1 Measuring inflation using CPI and GDP deflator Consumer Price Index (CPI) GDP deflator: Nominal GDP/Real GDP Differences between using CPI and GDP deflator Interest rate Nominal interest rate (i) and real interest rate (r) r = i - π After tax (t) real interest rate r A-T = i(1-t) - π Employment and Unemployment Labor force, unemployed, employed U = L –E Unemployment rate: u = U/L Government Budget and Debt Taxes (T) and Government purchases (G) Budget Deficit: T – G < 0; additions to government debt Budget Surplus: T – G > 0; subtractions to government debt Current Account and Capital and Financial Account Current Account (CA) Exports and Imports and Net Exports (NX) NX = Exports – Imports CA includes other accounts Capital and Financial Account (KFA) Increase in US ownership of foreign assets
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This note was uploaded on 02/22/2010 for the course EC EC 302 taught by Professor Wilson during the Fall '08 term at Michigan State University.

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Study_guide_1 - EC 302 Exam 1 Study Guide Topics to be...

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