econ quiz 2 study guide
econ quiz 2 study guide ECON 104
Popular in Introductory Macroeconomic Analysis and Policy, Goffe
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This 2 page Study Guide was uploaded by Evangelos Katradis on Sunday February 7, 2016. The Study Guide belongs to ECON 104 at Pennsylvania State University taught by Goffe in Spring2015. Since its upload, it has received 67 views.
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Date Created: 02/07/16
Real GDP= base yr price X quantity Nominal GDP= price X quantity 16.4 tril real GDP 18.0 tril nominal GDP GDP measures all of production, spending, or income in all economy. (K) capita manufactured goods owned by firms to produce other goods and services. ex. hammer intermediate goods used up/transformed in the production process ex. flourbread, woodhouse (I) investmentthe purchase of capital goods the addition of inventories (goods to be used or sold later) the purchase of a new house or apt Monetary vs. Fiscal Policy M: Conducted by U.S. Federal Reserve established by Congress “promote effectively the goals of max employment, stable prices and moderate long term interest rates” ***max employment, stable prices*** Fed Chair: Janet Yellin FOMC F: changes in federal expenditures and taxes (changed independently) controlled by President and Congress Money: asset that does: 1. medium of exchange 2. a store of value 3. a unit of account 4. standard of differed payment M1~ cash + checkable deposits M2~ M1 + savings accounts GDP Deflator= (nominal GDP/real GDP)X 100 CPI= current item price X base yr price X (current CPI/base yr CPI) GDP Deflator measures the “price level” CPI is an estimate of the change in prices of good and services, bought for consumption CPI limitations application / measurement ex. not applicable to all pop. groups / not designed to measure inflation inflation = % change in price index GDP deflator: 110 (2015 III) CPI: 237.8 (12/2015)
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