Measuring the flow of currency

Total household expenditure/total income paid by all businesses

The market value of all final goods and services produced in a country during a given period

GDP only includes the value of final goods, and inventory investment is a part of GDP

GDP=C I G NX Consumption Investment Government purchases Net exports

Real GDP: production of goods and services valued at constant prices

Nominal GDP: production of goods and services valued at current prices

GDP deflator = nominal GDP/real GDP: Monitoring price levels

Inflation rate = (Δ GDP deflator)/first-year GDP deflator

GDP is not a perfect measure of welfare

Total income earned by permanent residents of a country

Total income of a country’s residents less depreciation

Basically the same as NNP, the difference is due to statistical error

Excludes retained earnings

Personal income less personal taxes and non-tax payments

Determination of CPI

Inflation rate = (CPI in the second year - CPI in the first year) / CPI in the first year

question

physical capital per capita

human capital per capita

natural resources per capita

technical knowledge

Diminishing returns: As the amount of input increases, the return from each additional unit of input decreases.

Catch-up effect: The characteristic that countries that start out poor tend to grow faster than countries that start out rich

Employed

Unemployed: A person who is able to work and has tried to find a job but has not found one.

Non-labor force: full-time students, houseworkers, retirees, etc.

Unemployment rate = number of unemployed people / (labor force = number of employed people number of unemployed people)

Participation rate = labor force/adult population

Employment website

University Career Counseling Office

head-hunting company

A set of institutions in an economy that facilitates matching one person's savings with another person's investments

Financial market

financial intermediaries

National Savings/Loanable Funds

supply and demand

savings incentives

investment incentives

budget surplus

The price of an asset drops significantly

Bankruptcy of financial institutions

Decline in confidence in financial institutions

Insufficient credit

economic downturn

The economy behaves as a vicious cycle

Finance: the study of the decisions people make about allocating resources and responding to risks within a certain period of time

time

risk

Asset valuation

Function

type

money quantity

central bank

bank

open market operations

Bank loan

reserves

bank run

inflation

economic variables

circulation

Exports: Goods and services produced domestically and sold abroad

Imports: Goods and services produced abroad and sold domestically

Net Exports: Exports - Imports, Trade Balance

Trade surplus: Exports > Imports

Trade deficit: Imports > Exports

Trade balance: imports = exports

Net Capital Outflow: Net Foreign Investment

Net capital outflow (NCO) = net exports (NX)

Savings = Domestic investment Net capital outflow

Nominal exchange rate: exchange rate for cash

Appreciation, depreciation

Real exchange rate: the rate at which goods and services from one country are exchanged for goods and services from another country

Real exchange rate = nominal exchange rate x domestic price/foreign price

purchasing power parity theory

loanable funds market

foreign exchange capital market

Government deficit: negative public savings, reducing the supply of loanable funds and crowding out investment

trade policy

Political instability and capital flight

Recession: A period in which real incomes fall and unemployment increases

depression: severe recession

irregular and unpredictable

Most macroeconomic variables fluctuate simultaneously

Unemployment increases as output decreases

Root causes of volatility

Aggregate demand curve: slopes downward to the right

Aggregate supply curve: slopes upward to the right

Price Level and Consumption: Wealth Effect (Equilibrium)

Price Level and Investment: Interest Rate Effect (Equilibrium)

Price level and import and export: exchange rate effect (equilibrium)

Consumption causes supply and demand curves to shift

Investment causes supply and demand curves to shift

Government purchases cause supply and demand curves to shift

Changes in net exports cause supply and demand curves to shift

Monetary Policy

Fiscal policy

The Phillips Curve: Weighing Inflation and Unemployment in the Short Run

Natural rate of unemployment: In the long run, unemployment does not depend on money growth and inflation

Unemployment rate = natural unemployment rate - a (actual inflation - expected inflation)

The cost of lowering inflation

Are monetary and fiscal policies needed to stabilize the economy? ——Whether it depends on the market to adjust itself

Should the government increase spending or cut taxes to fight the recession? ——Government demand or market demand should be adopted

Should monetary policy be based on rules or discretion? ——Seeking stability or development?

Should central banks aim for zero inflation? ——Is it better to be stable or unstable?

Should the government balance the budget? ——Is it an advance for the future?

Do you want to encourage savings? ——Private savings or public savings?