Macroeconomics Ch. 9-11 (Exam 2)

Public good

nonrival my consumption influences your consumption

What is the formula used to calculate unemployment rate?

(Number of unemployed / labor force) X 100

In a closed economy, net exports are = _______. What is the formula associated with this?

0 Y = C+I+G

What are three ways to increase human knowledge?

1. Subsidize education 2. Subsidize research and development 3. Protect intellectual property

What are two key factors economists believe determine labor productivity?

1. The quantity of capital available to workers 2. The level of technology

If you don't have a job but you aren't actively looking and willing to get a job, then you are considered a _______________.

Discouraged worker

Is knowledge a public good?

Yes

What is the formula used to calculate Consumer Price Index (CPI)?

(Expenditures in the current year / expenditures in the base year) X 100

What is the formula used to calculate labor force participation rate?

(Labor force / WAP) X 100

What is crowding out?

A decline in private expenditures as a result of an increase in government purchases

What is the growth rate formula?

FV = PV(1+g)^t

What is the formula associated with a closed economy and savings and investment?

I = Y-C-G

What is the formula used to calculate real interest rate?

Real interest rate = nominal interest rate - inflation rate

What three benefits are derived from the financial system?

Risk sharing Liquidity Collection and Communication of Information

What are the costs of anticipated inflation?

Shoe leather cost & menu costs

What are the three types of unemployment?

Structural, Cyclical, and Frictional

What is the idea of convergence or "catch-up"?

The prediction that the level of GDP per capita (or income per capita) in poor countries will grow faster than in rich countries.

What is the equation of GDP?

Y = C+I+G+NX (This is only in an open economy)

Private good

rival good excludable, enough for everyone