Econ chapter 5

2014 GDP durable good

Car produced in Detroit 2013 but not sold until 2014 what should the value be

economy will behave in the near future

Change in Leading Economic Index

wages and salaries purchase of products and services DOES NOT INCLUDE: TRANSFERS

Government expenditures include

Net Exports (-)

Import greater than Exports

always will be equal

In the circular flow diagram the value of household sector and value of Business sector

net exports

Smallest part of the U.S GDP

0.81

least likely to be heading into recession when the National Activity Index

4 to 5 years

150 years U.S economy had endured a recession on average about every

Personal Consumption expenditures

Durable goods Nondurable goods Services

Jobless recovery

Economic recovery produces too few jobs to significantly reduce the unemployment rate

Investment

GDP includes inventory where

Great Depression

Macroeconomics developed explain

probably moved in to a recession

National Activity Index drops to -0.83 this month after being above 0.36 for the previous three months. The economy has.....

GDP=

Personal consumption + investment + government purchases + (export-import)

recession

Short term interest rates exceed long term interest rates

expenditure and income

Two ways the government used by government in estimating GDP

environmental quality and economic activity

Wealthier countries tend to value environmental quality more then developing countries (more time and money to worry about environmental quality)

peak

What comes right after recovery in the business cycle

pollution

What is not a measured part in the GDP

what the consumer bought the product for

What is the change in the GDP

Business cycle

periodic fluctuation of economic activity varies in duration and magnitude

GDP accounts

spending time DOES NOT COUNT GDP paying for services does

Economic recovery

unemployment drops

National Activity Index

weighed average of 85 indicators