Review intermediate macroecon

How do we measure normal of living Measuring the standard of living in a inelegant is to use real national income per capita. This is found that dividing real national income ( interruption or GNP) by the fare population. 2. How can European unemployment be reduced? exchange bank should decrease interest outranks, and allow for an increase in demand, and unemployment would decrease. They deficiency to be less protective, to eliminate these labor market rigidities, and to adopt US style labor market institutions 3. What are the benefits of the Euro?No more changes in the relative price of currencies for European firms to worry about, no more pauperization to change currencies when crossing borders. 4. What has contributed to the exalted economic growth of China? A. The starting line Is high accumulation of capital. The Investment rate exceeds 40% of output, a high number. Compared to US which Is 17%. More capital means higher productiveness and higher output. B. The second is rapid technological progress. By making Chinese firms work with and learn from foreign firms, the productivity of the Chinese firms has increase dramatically. Chapter 2 1.What Is GAP, value added approach A measure of aggregate output in the national income accounts (The market value of goods and services produced by labor and airscrew located in the US) VALUE ADDED Sales Intermediate goods Intermediate nigh is a good used in production of another good. more or less goods can be both concluding goods and intermediate goods. (EX Final Potatoes exchange directly to consumers/ Intermediate Potatoes used to produce potato chips) 2. nominated and authoritative GAP Nominal sum of quantities of final goods produced times their current price. Nominal GAP increases over time for 2 reasons a.Production of most goods increase eer time. B. Prices of most goods also increase over time. Real Sum of quantities of final goods times constant (rather than current prices) 3. GAP Deflator the ratio of nominal GAP to real GAP in year t ICP The cost of a presumptuousness list of goods and services consumed by a typical urban dweller Inflation A sustained rise in the prevalent level of prices Inflation rate The rate at which the price level increase over time. 4. campaign chock up and Discourage workers Labor Force The sum of those employed and those unemployed Discourage Workers A person who has given up looking for employment. . Unemployment rate and Labor force participation rate Unemployment rate The ratio of the number of unemployed to the labor force Labor Force Participation rate The ratio of the labor force to the total population of working age (non-institutional civilian population) Chapter 3 1. MAC, multiplier (CLC) The set up on consumption of an additional dollar of disposable income 2. Consumption incline A function that relates consumption to its determinants 3. Determination of output in Goods mart 4. Keynesian cross 5. What shifts the Z line 6. Deter minants of Investment 7. Shifts of the IS curve