Popular in Principles of Macroeconomics
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This 2 page Study Guide was uploaded by Morgan Genelin on Sunday February 28, 2016. The Study Guide belongs to ECON2020 at University of Colorado taught by Murat Iyugan in Winter 2016. Since its upload, it has received 587 views. For similar materials see Principles of Macroeconomics in Economcs at University of Colorado.
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The content was detailed, clear, and very well organized. Will definitely be coming back to Morgan for help in class!
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Date Created: 02/28/16
Definitions: Opportunity Cost: the cost of what we must give up (usually the cost of the second best alternative) Marginal Cost: The cost of adding another good Ceteris Paribus: All things equal Production Possibilities Frontier: Show the value of trade by expressing opportunity cost as slope Absolute Advantage: one is better in absolute terms Comparative Advantage: One is better in relative terms Compliments: Increase in price A, decrease supply/demand B Substitutes: Increase in price A, increase supply/demand B Normal Good: Income increases so demand increases Inferior Good: Income increases so demand decreases Tariff: Imposing a tax on imported goods Quota: Setting a limit on the number of imports Depression: a deep and prolonged downturn Recession: A downturn when output and employment are falling (shorter than depression) Expansion: GDP increases Contraction: GDP decreases Trade Surplus: exports are greater than imports Stock Variable: Total amount inside something (wealth, debt) Flow Variable: amount measured OVER TIME (income, spending) Positive Analysis: Explains how it is (factual) Normative Analysis: Explains how it ought to be Nominal GDP: The sum of all final goods and services produced within an economy over a given period of time measured in current prices Real GDP: Sum of all final goods and services produced within an economy over a given period of time measured in constant prices Frictional Unemployment: Natural cycle between workers and jobs Structural Unemployment: Natural cycle with the business cycle: recessions and depressions and such Cyclical Unemployment: Short term Variables Equations Y: Income/GDP Y = C + I + G + NX Finding GDP in an open economy C: Consumer Spending Y – T Disposable income G: Government Spending Y – T C Private Savings T: Tax T – G Public Savings I: Investment Y – C G National Savings S: Savings ( I – S) + NX = 0 National Income Account in Open Economy NX: Net Exports (ExportsImports) GDP Deflator NominalGDP RealGDP Consumer Price Index Priceindex New−Priceindex old∗100 Labor Force Participation Rate Price IndexOld U+E ∗100 Unemployment Rate Adult Population U Cost of inflation Labor Force∗100 P t+1 −P(t) Real inflation Rate ∗100=π P(t) Fisher Equation D (t+1)= D t)(1+r) P(t+1) P t) a. i = r + π
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