GDP, unemployment, inflation, fiscal and monetary policy concepts and formulas.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What does GDP measure?
- The total market value of all final goods and services produced within a country in a specific period
- How does nominal GDP differ from real GDP?
- Nominal GDP is measured at current prices; real GDP adjusts for inflation using a base year
- The GDP deflator is used to convert ____ into real GDP
- nominal GDP
- GDP = ____
- C + I + G + (X - M)
- Unemployment rate = (____ / labor force) × 100
- number of unemployed
- What is frictional unemployment?
- Unemployment caused by the time workers take to search for jobs or transition between jobs
- What is structural unemployment?
- Unemployment from a mismatch between workers' skills and available jobs, or geographic location
- What is cyclical unemployment?
- Unemployment caused by downturns in the business cycle, when aggregate demand falls
- What is the natural rate of unemployment (NAIRU)?
- The unemployment rate when the economy is at full employment, with only frictional and structural unemployment
- What is inflation?
- A sustained increase in the general price level of goods and services in an economy
- What is the key difference between the CPI and the GDP deflator?
- The CPI measures price changes for a fixed basket of consumer goods; the GDP deflator measures prices for all goods and services produced
- What is demand-pull inflation?
- Inflation caused by aggregate demand exceeding aggregate supply, described as too much money chasing too few goods
- What is cost-push inflation?
- Inflation caused by an increase in production costs, such as wages or raw materials
- What is deflation?
- A sustained decrease in the general price level of goods and services
- What are automatic stabilizers?
- Fiscal mechanisms that automatically reduce economic fluctuations without new legislation, such as unemployment benefits and progressive taxes