Econ 102 - Prelim 1 Review - National Output (Income) (GDP,...

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National Output (Income) (GDP, GNP, etc.) Chapter 6 Definition Expenditure Approach: Y = C + I + G + (X M) o Closed Economy without a Government: Y = C + I o Closed Economy with a Government: Y = C + I + G Income Approach (National Income) Equivalence of Approaches Nominal vs. Real GDP (GDP Deflator) Intermediate vs. Final Goods Circular Flow of Income
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Inflation and Unemployment Chapter 7 Inflation Definition Consumer Price Index (CPI) Producer Price Index (PPI) Base Year and Fixed Weights New (Chained) Procedure Unemployment Definitions of Employed (E), Unemployed (U) and In/Out of Labor Force (LF) Labor Force Participation Rate: LF/Pop. Unemployment Rate: U/(E + U) Types of Unemployment
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Chapter 8 Without a Government o Aggregate Consumption (C) o Marginal Propensities to Consume and Save o Planned Investment (I) vs. Actual Investment o Planned Inventories are Included in Planned Investment o Unplanned Inventories Key Component of Goods Market o Planned Aggregate Expenditures: AE C + I o Aggregate Output (Y) Real GDP o Equilibrium: No Tendency for Change o Equilibrium in the Goods Market: AE = Y o Importance of 45° Line o Movement Towards Equilibrium (Increase or Decrease Production as Response to Unplanned Inventories) o Planned Investment Multiplier: 1/(1 MPC) Change in Output (Income): ∆I*{1/(1 –
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This note was uploaded on 04/07/2008 for the course ECON 1120 taught by Professor Wissink during the Spring '05 term at Cornell University (Engineering School).

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Econ 102 - Prelim 1 Review - National Output (Income) (GDP,...

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