Ap Macro Unit 2

% change in GDP

year 2 - year 1 / year 1 x 100

What are intermediate goods?

transactions and used goods and shadow market

Expenditures approach GDP

C+I+G+ (X-M)= consumer spending + Business investments + Government spending + (eXports- iMports)

Income approach GDP

W+R+i+Pr= WAGE (labor income)+ (RENTal income)+ Interest+ Profit

Unemployment rate

#unemployed / # in labor force x 100

labor force

employed + # unemployed

Frictional unemployment

Temporary unemployment between jobs

structural unemployment

changes in the labor force make some skills obsolete (job no longer exists)

Cyclical unemployment

Sick economy due to recession

Natural rate of unemployment (NRU)

frictional + structural unemployment

CPI

price of market basket/price of market basket in base year x 100

Inflation rate

(New CPI-Old CPI)/(Old CPI) x 100

GDP Deflator

Nominal GDP/Real GDP x 100