Studied by 8 peopleCalculating GDP growth
New-old/old x100
Calculating GDP formula
C+I+G(X-M)
Circular flow of income model
ressource market-firms-product market-consumers
recession
point where the economy is decreasing
boom
highest point in the economy
recovery
economy slowly increases
trough
lowest point in the economy
advantages of GDP
shows size of economy
can show changes in economy
disadvantages of GDP
black market doesn’t appear
doesn’t show quality of life
distribution of wealth not shown
aggregate demand
total spending on goods
aggregate supply
total amount of goods
LRAS
long term aggregate supply
SRAS
short term aggregate supply
monetary policies
supply of money
interest rates
fiscal policy
government policies - spending and taxes
inflation
general increase in price
cost-push inflation
aggregate supply costs increase
prices increase - people have to pay more
demand-pull inflation
aggregate demand is higher than aggregate supply
prices increase
Note
Flashcard