Review Sheet: Economic Indicators
- Define Gross Domestic Product.
- Identify each component of GDP by the expenditure method. Provide an example of each.
- Provide an example of: intermediate good, non-market transaction, non-productive transaction, secondhand sale, and underground economy. Why are these excluded from GDP?
- How is a recession defined in terms of GDP?
- What is unplanned investment? How is it a factor in GDP?
- How are net exports calculated? What does it mean if the net exports component is a negative number?
- What is GDP per capita?
- Explain the difference between nominal GDP and Real GDP.
- How is real GDP calculated using base/current year prices and quantities?
- What is the GDP Deflator? How is it used in real GDP calculations?
- What are the critical flaws of GDP as an economic indicator? In other words, what does it do poorly?
- Contrast Gross National Product (GNP) with Gross Domestic Product (GDP).
- Define: full employment, unemployed, labor force
- Identify each type of unemployment and provide an example.
- Which type of unemployment is most serious to economists? Least serious?
- Which two type of unemployment are present at full employment?
- Describe the impact of each on the calculation of the unemployment rate: Discouraged workers, students, the underemployed, part-time workers.
- Explain Okun’s Law.
- Define inflation. Explain cost push and demand pull inflation. Graph them.
- Identify the groups helped/hurt by inflation.
- What is the CPI? How does it measure inflation?
- What are market baskets? Why are the market baskets weighted in the CPI?
- How does the CPI differ from the GDP Deflator? How are the two are indicators similar?
- Explain the flaws imbedded in the CPI.
- What is the difference between Core CPI and standard (headline) CPI?