Ecn
Sue Holloway was an accountant in 1944 and earned 12,000 a year her son Josh Holloway is an accountant today and he earned 210,000 in 2013 the price index was 17.6 in 1944 and 218.4 in 2013 In real terms to Holloways income amounts about what percent of Josh Holloways income
70.9%
Absolute advantage
Ability to produce a good using fewer inputs and then another worker
Absolute advantage vs comparative advantage
Absolute advantage is different from comparative advantage because with absolute we are not looking at the opportunity cost for producing an alternative product we are comparing the quantities of inputs required by producers to reduce the same amount of a certain good
Changes in nominal GDP reflect
Both changes in prices and changes in the amounts being produced, refers to the production of goods and services valued at current prices
Some persons are counted out of the labor for us because they have made no serious or recent effort to look for work however some of these individuals may want to work even though they are too discouraged to make a serious effort to look for work if these individuals were counted as unemployed instead of out of the labor force than
Both unemployment rate in labor force participation rate would be higher
Real GDP
Changes in the amounts being produced not prices
Which of the following events must cause equilibrium price to fall
Demand decreases and supply increases
The unemployment rate is computed as the number of unemployed
Divided by the labor force all times 100, refers to the percentage of the labor force that is unemployed
Total output in an economy increases on each person specializes because
Each person spends more time producing that product in which he or she has a comparative advantage
The producer that requires a smaller quantity of inputs to produce a certain amount of a good relative to the quantities of input required by other producers to produce the same amount of that good
Has an absolute advantage in the production of that good
The consumer price index is used to
Monitor changes in the cost of living overtime, it is the measure of overall cost of goods and services brought by a typical customer
Equilibrium price on a supply demand curve
Price that balances the quantity supplied in the quantity demanded
The market demand curve
Represents the sum of quantities demanded by all the buyers at each price of the good Downward sloping
The GDP is defined as the
Value of all final goods and services produced within a country in a given period of time Measures income
Which of the following statements about real And nominal interest rate is correct
When the inflation rate is positive the Nominal interest rate is necessarily greater than the interest rate
The quantity demanded of a good is the amount that buyers are
Willing and able to purchase
The quantity supplied of a good is the amount that
sellers are willing and able to sell
The opportunity cost of an item is
what you give up to get that item