Econ

GDP

Dollar value of all goods/services produced in a given year within country bounds

Expenditures approach

Consumer spending+ investments+ government+ net exports

Not included in GDP

Intermediate goods, illegal/non-market activity

Frictional unemployment

In between jobs/searching

Structural

Lacking the skills or requirements for certain jobs

Cyclical

Lack of demand leads to high unemployment

Unemployment rate formula

number unemployed/ number in LF x 100

What happens with less than 5% unemployment

Rises prices because customers lend more when producers increase prices of resources

Demand pull

Consumer demand pulls prices up

Cost push

Suppliers force costs to increase

Real/nominalinterest rate formula

Nominal/real interest rate -/+ inflation rate

Injections (I+G+X)

Money added into the spending loop from outside sectors:

Investment- Businesses borrowing to expand.

• G (Government Spending): Money spent on public goods/services.

• X (Exports): Money earned selling goods overseas.

Factor market vs product market

• Factor Market: firms buy resources from households (e.g., hiring workers for wages).

• Product Market: households buy goods and services from firms