ECON103 Study Guide - Final Guide: Production Function, Aggregate Supply, Market Liquidity

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taupelion650

22 Dec 2016

School

University of Delaware

Department

Economics

Course

ECON103

Professor

wuchao

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Document Summary

Final goods (which of the following good is an example of _____: size of gdp (gdp = c+y+g+n) (make sure net exports, and only have 4 components) Nominal gdp, real gdp, gdp deflator (about calculation, 2 numbers will be given, calculate 3rd) Labor force definition (what is labor force made out of: labor force participation rate (need to know formula, not calculate) Rate of inflation (cpi t- cpi1 / cpi idk. If you have 2 years, gdp 2 gdp1 / gdp 1 *100. Gr year 1-2, gr year 2-3, gr year 4-5. Need the average of all growth rates. Gdp per capital: standard of living (good measure of standard of living) Private saving & public saving (private: think about household, they receive income, have to pay tax y-t+tr-c: why consumption tax something, co. Production function curve (law of diminishing marginal return, look at question on 2nd exam. 2 questions on exam on this: law of pertaining marginal returns, shit.

Related Questions

1. What are the three key macroeconomic variables?

2. What are the three macroeconomic objectives?

3. Define GDP? What it omits to avoid multiple counting? What does it fail to capture?

4. What are the three approaches to the measurement of GDP?

5. Differentiate between Real and nominal GDP.

6. What are CPI, PPI, GDP deflator?

7. What are the methods to measure the rate of inflation?

8. What is the application of the rate of inflation?

9. What are the weaknesses of CPI as a measure of the change in the cost of living over time?

10. Explain Purchasing power parity adjustment.

11. What is economic growth?

12. Define Rule of 70.

13. Labor Force: Define it. Who is included and who is excluded from the labor force?

14. What is the difference between the unemployment rate and labor force participation rate?

15. What are the different types of unemployment?

16. What is a natural unemployment rate?

17. What are the factors that cause natural unemployment?

cyanworm673

1. The economy produces 2 types of goods. Over the past 3 years, the Bureau of Economic Analysis (BEA) recorded:

2014 2015 2016

P Q P Q P Q

good a 10 20 11 20 12 21

good b 100 40 100 45 105 45

2. Compute Nominal GDP and the Nominal GDP growth rate in 2015 and 2016.

3. Compute Real GDP and the Real GDP growth rate in 2015 and 2016. Use 2014 as the base year.

4. Compute the GDP deflator and the growth in the deflator in 2015 and 2016.

1) In years 1 and 2, there are 2 goods produced in a given economy, hamburgers, and pens. In year 1,

10,000 hamburgers are produced and sold at $2 each, and in year 2, 40,000 hamburgers are produced

and sold at $2.10 each. In year 1, 15,000 pencils are sold for 2 dollars each, and in year 2, 38,000

pencils are sold for $3 each.

a)Calculate nominal GDP in years 1 and 2.

b)Calculate real GDP in years 1 and 2 using year 1 as the base year. Next, calculate the percentage

increase in real GDP from year 1 to year 2.

c)Calculate the GDP deflator and the percentage inflation rate from year 1 to year 2 using year 1

as the base year.

d)What is the CPI inflation rate using year 1 as the base year? Is this equal to the GDP deflator

inflation rate?

2. Now, in the above economy, also suppose that 8,000 notebooks were imported and sold for $1 each

in year 1, and 20,000 notebooks imported and sold for $5 each in year 2

a)Calculate nominal GDP in years 1 and 2.

b)What is the CPI inflation rate using year 1 as the base year?

c)What is the GDP deflator inflation rate using year 1 as the base year?

d)Are the two measures equal? Yes or No? And explain.

e)If the price of imported notebooks increases to $10 in year 3, how would this affect the CPI

inflation rate? How about the GDP inflation rate? Explain, but no need to show work.

3. Consider an economy that initially has a labor force of 2000 workers. Of these workers, 1500 are

employed. The economy enters a recession. Employment falls by 5%, and also, 0.4% of the

labor force becomes discouraged at the prospect of finding a job and leaves the labor force.

a)Can you calculate the employment rate given the information above? Explain.

b)Calculate the unemployment rate before and after the recession.

c)What is the unemployment rate taking discouraged workers into account?

d)Using Okun's law, calculate the expected percentage change in real GDP.

salmongnat422

ECON103 Study Guide - Final Guide: Production Function, Aggregate Supply, Market Liquidity

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