Test Monday on Economic Indicators: Below is review sheet with page numbers in McConnell

 

Price Index and Inflation (p141-148)
How is a Price index calculated?
What is CPI and the PPI? What is the difference between GDP deflator and CPI?
If prices rose from 150 to 200, the rate of inflation is…
What causes inflation? What’s the difference between cost-push and demand- pull
Explain the differences between nominal interest rates vs real interest rates.
Who is hurt or helped with unanticipated inflation?

 Unemployment (p134-140)

What does unemployment mean? Who is counted and not counted?
Explain he different phases of the business cycle
What are the different types of Unemployment?
Calculate the Unemployment rate
Calculating Okun’s Law
Explain the problems with the unemployment rate.
Define full employment, natural rate on unemployment and non-accelerating inflation rate of unemployment

 GDP (p. 112-126)

Y=C+ I + G +(x-m)
Define GDP
What’s included? What’s not?
Explain the difference between nominal GDP vs real GDP. How is real GDP identified?
Explain the GDP Gap and Okun’s Law.
What is potential GDP vs Actual GDP?



Know Formulas For:
Unemployment Rate
CPI and Inflation Rate
real GDP
Okun's Law and impact on potential GDP
real interest rates