GDP, unemployment, inflation, fiscal and monetary policy concepts and formulas.
40 cards · mixed cards · AI-written, checked twice. Edit anything.
- What does GDP measure?
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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?
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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
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nominal GDP- GDP = ____
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C + I + G + (X - M)- Unemployment rate = (____ / labor force) × 100
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number of unemployed- What is frictional unemployment?
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Unemployment caused by the time workers take to search for jobs or transition between jobs- What is structural unemployment?
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Unemployment from a mismatch between workers' skills and available jobs, or geographic location- What is cyclical unemployment?
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Unemployment caused by downturns in the business cycle, when aggregate demand falls- What is the natural rate of unemployment (NAIRU)?
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The unemployment rate when the economy is at full employment, with only frictional and structural unemployment- What is inflation?
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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?
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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?
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Inflation caused by aggregate demand exceeding aggregate supply, described as too much money chasing too few goods- What is cost-push inflation?
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Inflation caused by an increase in production costs, such as wages or raw materials- What is deflation?
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A sustained decrease in the general price level of goods and services- What are automatic stabilizers?
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Fiscal mechanisms that automatically reduce economic fluctuations without new legislation, such as unemployment benefits and progressive taxes
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