Homework #7 - Robert Garza ECON 3131 Homework 7 Gross...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Robert Garza ECON 3131 Homework # 7 Gross Domestic Product (GDP) - The value, tabulated using market prices, of all final goods and services produced within a nation’s borders during a given period. Real GDP - A price-adjusted measure of aggregate output, or nominal GDP divided by the GDP price deflator. GDP Deflator - A measure of the overall price level; equal to nominal GDP divided by real GDP. Consumer Price Index (CPI) – Measure of prices across a fixed basket of goods and services. Producer Price Index (PPI) – Similar to CPI, but aimed at what producers have to pay. It is the price index of raw materials, intermediate goods and commodities. Person Consumption Expenditure Index (PCE) – This Derives from consumption spending in GDP calculations. Marginal Propensity to Consume (MPC) - The amount of additional real consumption spending induced by an increase in real income. Monetary Policy Transmission Mechanism – The policy depends on the Fed and the open market transactions. For example, if an open market purchase is made, money supply would increase, I/ R would decrease, investments would increase, and GDP would increase. Potential or Natural GDP - The level of real GDP that is consistent with the economy’s natural rate of growth. Business Cycle - Variations in real GDP around its long-run growth path. Unemployment rate - The percentage of the civilian labor force that is unemployed. Countercyclical monetary policy – Stabilizing the aggregate demand should stabilize inflation and prices. Goldilocks economy
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/25/2011 for the course ECON 3311 taught by Professor Leonard during the Spring '09 term at University of Houston.

Page1 / 4

Homework #7 - Robert Garza ECON 3131 Homework 7 Gross...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online