ECO 1102 Chapter Notes - Chapter 5: Intermediate Good, Gdp Deflator

35 views3 pages

goldelk436

26 Aug 2016

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

roza220x and 38789 others unlocked

ECO 1102 Full Course Notes

Verified Note

46 documents

Document Summary

Microeconomics: the study of how households and firms make decisions and how they interact in markets. Macroeconomics: the study of the economy-wide phenomena, including inflation, unemployment, and economic growth. Gdp measures two things at once: he total income of everyone in the economy and the total expenditure on the economy"s output of goods and services. For the economy as a whole, income must equal expenditure. Every transaction has two parties: a buyer and a seller. Every dollar of spending by some buyer is a dollar of income for some seller. We can compute gdp for this economy in one of two ways: by adding up the total expenditure by households or by adding up the total income (wages, rent, and profit) paid by firms. The circular flow diagram: figure 5. 1 on page 101. Gdp definition: the market value of all final goods and services produced within a country in a given period of time.

Related Questions

Which of the following statements about GDP is correct

A) Money continuously flows from households to firms and then back to households, and GDP measures this flow of money

B) GDP measures two things at once: the total income of everyone in the economy and the total expenditure on the economy’s output of goods and services.

C) While not perfect, GDP is generally regarded as the best single measure of a society’s economic well-being.

D) All of the above are correct.

emeraldmarten620

What is the market for factors of production?

What is the market for factors of production?
1. The market for factors of production is where households and firms interact to trade factors of production for factor payments. For example this is where people provide firms with labor and firms pay them with wages.
What is the money market?
1. The money market is where households, firms, and the government may save and/or invest their money to earn interests. Money market includes banks, stock market, bonds market, and other financial institutions where economic actors can buy and sell financial assets to earn interests and/or dividends.
Who are the three economic actors in the circular flow model?
1. In a circular flow model, the three main economic actors are the households, firms, and the government. Households include the typical individual consumers. Firms include businesses and similar producers in the economy. Finally, the government refers to the whole government system from federal to local level.
How is the national income of an economy determined?
1. The national income of an economy is determined by measuring the total value of the output produced in an economy or the total income earned by the actors in the economy. In a circular flow model, we can see that the value of total output produced should equal the total value of income generated and earned in the economy. This is because every dollar spent by someone in the economy is received by another person in the economy as income.
What is GDP?
1. The gross domestic product or GDP represents the sum total of the value of the final goods and services produced within the economy for a given year. It is the most commonly used measure of its economy’s productivity and income.

Q17. The term "recession" refers to a
a. period of decline in real GDP over two consecutive quarters
b. fall in the general level of real wages over two consecutive quarters
c. fall in the CPI over two consecutive quarters
d. fall in the rate of increase of real per capita GDP

Q18. Cost changes generally lag behind price changes during the business cycle.
a. true
b. false

Q19. Measuring the intensity of the business cycle requires
a. adding seasonal variations to cyclical fluctuations
b. adding seasonal variations and random fluctuations to cyclical changes
c. eliminating seasonal variations and identifiable random forces from the data
d. multiplying the trend by the cyclical fluctuations

Q20. During the contraction phase of the business cycle,
a. prices fall relative to costs, reducing profit margins
b. costs fall relative to prices, reducing profit margins
c. prices fall relative to costs, increasing profit margins
d. costs fall relative to prices, increasing profit margins

Q21. The aggregate supply curve is
a. a curve showing the quantities of total output that business will purchase for investment at various price levels
b. a curve showing the quantities of total output that will be offered for sale at various price levels
c. a curve showing the quantities of goods and services that households will provide at various price levels
d. one point on the aggregate expenditure curve

Q22. The aggregate demand curve is the sum of individual demand curves in the economy.
a. true
b. false

Q23. The classical economic doctrine held that the normal equilibrium position of the economy was one of
a. rising interest rates
b. some unemployment
c. rising prices
d. full employment

whiteswan988

ECO 1102 Chapter Notes - Chapter 5: Intermediate Good, Gdp Deflator

ECO 1102 Full Course Notes

Document Summary

Get access

Related textbook solutions

Principles of Economics

Principles of Macroeconomics

Principles of Microeconomics

Related Documents

ECO 1102 Study Guide - Midterm Guide: Foreign Portfolio Investment, Longrun, Corporate Bond

ECO 1102 Lecture Notes - Lecture 5: Transfer Payment, Gdp Deflator

ECO 1102 Lecture Notes - Lecture 5: Transfer Payment, Intermediate Good, Foreign Direct Investment

Related Questions