Unemployment Rate - number of unemployed individuals divided by the total of those employed and unemployed the total labor force. Price increases in some sectors of the economy must have outweighed price declines in other sectors in order for the average level of prices to rise.
Inflation Rate - percentage increase in the average level of prices Deflation Rate - percentage decline in the average level of prices Figure In other words, every participant is a "price taker" as no participant influences the price of a product.
Complementary and Conflicting Goals Enacting policy to Unit 5 macroeconomics one goal may also lead to the achievement of another goal. In this case the "real" interest rate the nominal interest rate adjusted for expected inflation may be negative indicating that the purchasing power of your bank deposit is actually declining.
If costs of production are not borne by producers but are by the environment, accident victims or others, then prices are distorted. For the consumer, that point comes where marginal utility of a good, net of price, reaches zero, leaving no net gain from further consumption increases.
Efficiency is improved if more output is generated without changing inputs, or in other words, the amount of "waste" is reduced. Nominal Interest Rate - the market interest rate that is paid by borrowers to lenders. According to theory, this may give a comparative advantage in production of goods that make more intensive use of the relatively more abundant, thus relatively cheaper, input.
Real GDP - value of total output corrected for any changes in prices Economic Growth - change in the physical output of an economy, typically measured as the change in Real GDP.
Microeconomics is the study of the behavior of individual economic agents. Historic examples of units of measure include the livre tournoisused in France from to whether or not livre coins were minted.
Measuring Total Output Total output is measured by the market dollar value of all final goods and services produced by an economy during a given period of time, usually a year. In microeconomicsit applies to price and output determination for a market with perfect competitionwhich includes the condition of no buyers or sellers large enough to have price-setting power.
Now consider a young couple who has just borrowed to buy a home. And whenever we must make choices, we must give up something else that we also desire.
With an unexpected increase in inflation, those savings suddenly represent less purchasing power. The same factors are used to explain differences in the level of output per capita between countries, in particular why some countries grow faster than others, and whether countries converge at the same rates of growth.
Related problems in insurance are adverse selectionsuch that those at most risk are most likely to insure say reckless driversand moral hazardsuch that insurance results in riskier behaviour say more reckless driving.
Macroeconomics examines supply and demand and the role of prices, as well as savings and investment and the role of interest rates. AP Chemistry and College Credit or Placement The AP Chemistry course is designed to be the equivalent of the general chemistry course usually taken during the first college year.
A widely accepted general standard is Pareto efficiencywhich is reached when no further change can make someone better off without making someone else worse off.
Interest Rate Not only do goods and services have prices related to them, but money also has a "price. The opportunity cost of an activity is an element in ensuring that scarce resources are used efficiently, such that the cost is weighed against the value of that activity in deciding on more or less of it.
If you don't own a home you probably don't have a good feel for what interest rates can cost you. The most obvious kinds of firms are corporationspartnerships and trusts. Customers without knowledge of whether a car is a "lemon" depress its price below what a quality second-hand car would be.
That would include the Tennessee Toyota plant, and you may care little about the Ford plant in Mexico. Here as well, the determinants of supply, such as price of substitutes, cost of production, technology applied and various factors inputs of production are all taken to be constant for a specific time period of evaluation of supply.
It is important to recognize that we can have inflation even though the prices on some products are falling. It has significant applications seemingly outside of economics in such diverse subjects as formulation of nuclear strategiesethicspolitical scienceand evolutionary biology.
In theory, in a free market the aggregates sum of of quantity demanded by buyers and quantity supplied by sellers may reach economic equilibrium over time in reaction to price changes; in practice, various issues may prevent equilibrium, and any equilibrium reached may not necessarily be morally equitable.
With an unexpected increase in inflation they may be looking pretty good. After correcting for inflation, real government spending has increased by less than 8 percent. In accounting[ edit ] The unit of account in financial accounting refers to the words that are used to describe the specific assets and liabilities that are reported in financial statements rather than the units used to measure them.
Scarcity is represented in the figure by people being willing but unable in the aggregate to consume beyond the PPF such as at X and by the negative slope of the curve.
Inthe average mortgage rate was. 5 Macroeconomics MULTIPLE-CHOICE SAMPLE QUESTIONS Answer Key UNIT 1.
D 2. B 3. C 4. E 5.
E 6. D 7. B 8. B 9. C D B B C A D B D D C E Answers to Sample Multiple-Choice Questions. Title: makomamoa.com Author: TypeG4 Created Date.
ECS makomamoa.comle_choice. ECS Concepts only. ECS mq. ECS notes_(1) ECS Study Unit 4. ECS Study Unit 5. ECS Study Unit 6. ECS Study Unit 8. 1 Macroeconomics Macroeconomics (Greek makro = ‘big’) describes and explains economic processes that concern aggregates.
An aggregate is a multitude of economic. Advanced Placement Economics Teacher Resource Manual © National Council on Economic Education, New York, N.Y. 5 Macroeconomics LESSON 5 UNIT Introduction and. For instructors who prefer less coverage of micro topics than is offered in MankiwÆs highly acclaimed textbook Principles of Macroeconomics, Mankiw now provides an excellent resource in this briefer version.
People generally have a hard time understanding macroeconomics, but after 7 years of teaching this course at university level, I have mastered the best ways of explaining its concepts for students to be able to understand them and relate them to the real world.Unit 5 macroeconomics