Week 2 Application: International Trade & Measuring a Nation's Income

Gross Domestic Product (GDP)

The total value of goods produced and services provided in a country during one year, excluding income earned abroad.

Minimum Wage Impact

The uncertain long-term impact of minimum wage policies on the welfare of workers, often leading to strategic shifts in labor policy.

Nominal GDP

The value of all finished goods and services produced in a country at their current market prices.

When the government imposes a binding price ceiling in a competitive market a ....... of goods arises and sellers must ...... these goods

shortage, ration

Rent Controls

Government regulations on the maximum amount of rent a landlord can charge, often leading to housing shortages and discrimination.

Import Quotas

Restrictions on the quantity of a good that can be imported, similar to tariffs in negative effects on consumers.

Price Ceiling

A legal maximum on the price at which a good can be sold, leading to shortages in competitive markets.

Price Floor

A legal minimum on the price at which a good can be sold, often leading to surplus.

Perfect Competition

A market structure in which all firms are price takers, and entry and exit are easy.

Earned Income Credit

A tax credit for low- to moderate-income working individuals and couples, particularly those with children.

Federal Reserve's Economic Data

An online site for exploring economic data provided by the Federal Reserve.

Real GDP

GDP adjusted for inflation or deflation, providing a more accurate figure of economic output.

Elastic Goods

Goods and services for which demand changes significantly with price.

Inelastic Goods

Goods and services for which demand does not change significantly with price.

Shortfalls of GDP

Limitations of GDP as an economic indicator, such as its inability to measure happiness, time off, and environmental quality.

Tariffs

Taxes on imported goods, often used to protect domestic industries but can increase costs for consumers.

Rent Control Expansion

The expansion of rent controls despite evidence showing it reduces the overall amount of affordable housing.

Components of GDP

The formula Y = C + I + G + NX, representing the total spending in the economy.

Minimum Wage

The lowest wage permitted by law or by a special agreement.

The most successful teams have what 3 things in common

a high degree of social sensitivity, equal time to each other, more woman in them

......... routinely outperforms individual intelligence

helpfulness