Economics — 30 MC and 2 FRQs in 45 minutes

Dollar value of all final goods and services produced within a countries borders in a year

• comparing gdp of one year to another to tell us if there is growth

• comparing gdp before and after a policy to see if it was effective

C - Consumer Spending IB - Business Investments G - Government Spending Nx - Exports-Imports so GDP = C+IB+G+Nx

PAPAYAS. P - Payments from government (Non production transaction) A - Anything Illegal (Non Market) P - Products that arent final (intermediate goods) A - Anything Used (Non Production) Y - Your leisure time (Non Market) A - Anything for which you dont get paid for S - Stocks and Bonds (Non production)

• environmental quality and resource depletion

• quality of life

• Poverty and economic inequality

Nominal GDP is what you see

C+IB+G+Nx

GDP/population or RGDP/population

RGDP = (Nominal GDP/Deflator) x 100

((Current year's GDP - Last year's GDP)/ (Last year's GDP)) x 100

((RGDP2-RGDP1)/(RGDP1)) x 100

Total market value of all final goods and services in a year from factors of production (resources). It's owned by the countries resources

its usually due to production...

• economic systems

• private ownership of property

• education levels

• Kapital Stock

• Efficient financial institutions

• Free Trade

A rise in general price level

its usually 2-4%

Inflation should always be less than economic growth rates

Printing too much money demand - pull inflation cost - push inflation

fixed income receivers Government Workers Landlords Savers Creditors

Flexible income receivers Debtors

Measures the cost of living over time

1. Fix the basket

• Identify the goods and services a customer buys

• Find Prices

3. Calculate basket total

4. Choose a base year

Note: CPI doesn't include taxes or investment items

CPI = (current cost of basket/base year) x 100

(Nominal GDP/Real GDP) x 100

country X's overall CPI was 200

(420.5-312.7)/312.7 x100 = 34.47% is the inflation rate