BOSTON UNIVERSITY EC 102 WATSON FINAL COURSE
ASSESSMENT
1.the market value of all FINAL goods and services produced within a
country in a year: GDP
2.GDP: what is the most fundamental macro concept?
3.calculates GDP by adding up the value of expenditures on all FINAL
goods and services in the economy: Measuring GDP: The Expenditure
Method
4.GDP = personal consumption + investment + government PURCHASES
+ exports - imports: Expenditure Method Formula
5.Y = C + I +G +NX: GDP important identity
6.an estimate of what GDP would have been id all factors of production
(labor and capital) had been used at their "normal" rates: Potential GDP
7.GDP / Population: Per capita GDP
8.the value of all goods and services measured at CURRENT prices:
Nominal GDP
9.the value of all goods and services measured at a CONSTANT price level: -
Real GDP
10.REAL GDP: Y =
11.Price level. Measured by GDP deflator or Consumer Price Index (CPI): P =
12.NOMINAL GDP: P x Y =
13.(NOMINAL GDP / REAL GPD) x 100: The GDP deflator (P)
14.((P in later year - P in earlier year)/ P in earlier year)) x 100: Inflation
using P (GDP Deflator)
15.Measures changes in the prices of things that an average consumer buys.
: Consumer Price Index (CPI)
16.(cost of basket in given month/ cost of basket in base period) x 100: CPI
formula
17.((CPI in later year- CPI in earlier year)/ CPI in earlier year)) x 100:
Inflation using CPI
18.substitution bias, increase in quality bias, new product bias, and
outlet bias: Reasons why the CPI may overstate inflation
19.the CPI uses fixed weights, so it cannot reflect consumers' ability to
substitute towards goods whose relative prices have fallen: Substitution
bias
20.some of the increase in the price of a product may reflect an
improvement in the product's quality, while the rest represents true
inflation. It is hard to separate the two.: Increase in quality bias
21.the "market basket" used in the CPI calculation is not updated
frequently, so it fails to include new products whose prices tend to fall
rapidly soon after their introduction: New product bias
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, BOSTON UNIVERSITY EC 102 WATSON FINAL COURSE
ASSESSMENT
22.increasingly, consumers buy from discount or lower-price on-line
retail- ers.BLS collects price data primarily from full-price retail stores, not
taking into account the lower-price outlets.: Outlet bias
23.CPI includes only goods typically bought by consumers. GPD
deflator includes ALL goods: CPI vs. GDP Deflator: goods
24.CPI includes imported goods while GDP deflator includes only
DOMESTIC goods: CPI vs. GDP Deflator: origin of goods
25.CPI uses a FIXED basket of goods. GDP deflator uses a CHANGING
basket of goods: CPI vs. GDP Deflator: basket of goods
26.real interest rate + inflation rate: nominal interest rate (i)
27.when price level goes up, interest rates go up: Relation between price
level and interest rate
28.When inflation is going down. Prices are still increasing, just NOT
AS FAST: Disinflation
29.when prices are going down: Deflation
30.(value in earlier year dollars) x (CPI later/ CPI earlier): How to calculate
what a past amount would be worth in a later year
31.worked, even part time, in the last week: employed
32.did not work in the last week, but did look for job over the last month:
un- employed
33.employed + unemployed people: labor force
34.number unemployed/ number in labor force: unemployment rate
35.labor force/ civilian non institutional population: labor force participation
rate
36.people over 16, not in the military, jail, or another institution: Who is in
the civilian non institutional population?
37.people who are in between jobs: frictional unemployment
38.results from skills no longer being relevant to work: structural
unemploy- ment
39.unemployment caused by a business cycle recession: cyclical
unemploy- ment
40.Normal rate of unemployment. Frictional + structural unemployment:
nat- ural rate of unemployment
41.can reduce structural unemployment: How do training programs
influence the natural rate of unemployment?
42.tends to increase frictional unemployment: How does unemployment
com- pensation influence the natural rate of unemployment?
43.legal restrictions on hours, vacations, retirement, and especially firing
control the natural rate of unemployment: How do labor market policies
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16
, BOSTON UNIVERSITY EC 102 WATSON FINAL COURSE
ASSESSMENT
influence the natural rate of unemployment?
3/
16
ASSESSMENT
1.the market value of all FINAL goods and services produced within a
country in a year: GDP
2.GDP: what is the most fundamental macro concept?
3.calculates GDP by adding up the value of expenditures on all FINAL
goods and services in the economy: Measuring GDP: The Expenditure
Method
4.GDP = personal consumption + investment + government PURCHASES
+ exports - imports: Expenditure Method Formula
5.Y = C + I +G +NX: GDP important identity
6.an estimate of what GDP would have been id all factors of production
(labor and capital) had been used at their "normal" rates: Potential GDP
7.GDP / Population: Per capita GDP
8.the value of all goods and services measured at CURRENT prices:
Nominal GDP
9.the value of all goods and services measured at a CONSTANT price level: -
Real GDP
10.REAL GDP: Y =
11.Price level. Measured by GDP deflator or Consumer Price Index (CPI): P =
12.NOMINAL GDP: P x Y =
13.(NOMINAL GDP / REAL GPD) x 100: The GDP deflator (P)
14.((P in later year - P in earlier year)/ P in earlier year)) x 100: Inflation
using P (GDP Deflator)
15.Measures changes in the prices of things that an average consumer buys.
: Consumer Price Index (CPI)
16.(cost of basket in given month/ cost of basket in base period) x 100: CPI
formula
17.((CPI in later year- CPI in earlier year)/ CPI in earlier year)) x 100:
Inflation using CPI
18.substitution bias, increase in quality bias, new product bias, and
outlet bias: Reasons why the CPI may overstate inflation
19.the CPI uses fixed weights, so it cannot reflect consumers' ability to
substitute towards goods whose relative prices have fallen: Substitution
bias
20.some of the increase in the price of a product may reflect an
improvement in the product's quality, while the rest represents true
inflation. It is hard to separate the two.: Increase in quality bias
21.the "market basket" used in the CPI calculation is not updated
frequently, so it fails to include new products whose prices tend to fall
rapidly soon after their introduction: New product bias
1/
16
, BOSTON UNIVERSITY EC 102 WATSON FINAL COURSE
ASSESSMENT
22.increasingly, consumers buy from discount or lower-price on-line
retail- ers.BLS collects price data primarily from full-price retail stores, not
taking into account the lower-price outlets.: Outlet bias
23.CPI includes only goods typically bought by consumers. GPD
deflator includes ALL goods: CPI vs. GDP Deflator: goods
24.CPI includes imported goods while GDP deflator includes only
DOMESTIC goods: CPI vs. GDP Deflator: origin of goods
25.CPI uses a FIXED basket of goods. GDP deflator uses a CHANGING
basket of goods: CPI vs. GDP Deflator: basket of goods
26.real interest rate + inflation rate: nominal interest rate (i)
27.when price level goes up, interest rates go up: Relation between price
level and interest rate
28.When inflation is going down. Prices are still increasing, just NOT
AS FAST: Disinflation
29.when prices are going down: Deflation
30.(value in earlier year dollars) x (CPI later/ CPI earlier): How to calculate
what a past amount would be worth in a later year
31.worked, even part time, in the last week: employed
32.did not work in the last week, but did look for job over the last month:
un- employed
33.employed + unemployed people: labor force
34.number unemployed/ number in labor force: unemployment rate
35.labor force/ civilian non institutional population: labor force participation
rate
36.people over 16, not in the military, jail, or another institution: Who is in
the civilian non institutional population?
37.people who are in between jobs: frictional unemployment
38.results from skills no longer being relevant to work: structural
unemploy- ment
39.unemployment caused by a business cycle recession: cyclical
unemploy- ment
40.Normal rate of unemployment. Frictional + structural unemployment:
nat- ural rate of unemployment
41.can reduce structural unemployment: How do training programs
influence the natural rate of unemployment?
42.tends to increase frictional unemployment: How does unemployment
com- pensation influence the natural rate of unemployment?
43.legal restrictions on hours, vacations, retirement, and especially firing
control the natural rate of unemployment: How do labor market policies
2/
16
, BOSTON UNIVERSITY EC 102 WATSON FINAL COURSE
ASSESSMENT
influence the natural rate of unemployment?
3/
16
