Sides Game Macro One

Basket of Goods 2020 = $400 (base year) 2021 = $500 Inflation Rate =

Basket of Goods 2020 = $400 (base year) 2021 = $500 Inflation Rate = $ 500- $ 400 $400 Inflation Rate = 25%

Index Value 2020 = 100 2021 = 125 Nominal GDP 2020 = $20 trillion 2021 = $28 trillion Real GDP 2021 = $

Index Value 2020 = 100 2021 = 125 Nominal GDP 2020 = $20 trillion 2021 = $28 trillion Real GDP 2021 = $22.4 trillion

GDP Growth Rate Nominal 2020 = $20 trillion 2021 = $28 trillion Nominal Growth Rate?

GDP Growth Rate Nominal 2020 = $20 trillion 2021 = $28 trillion Nominal Growth Rate ($28-$20)/$20 = .4 40% nominal growth

GDP Growth Rate Real 2020 = $20 trillion 2021 = $22 GDP Growth Rate Real 2020 = $20 trillion 2021 = $22.4 trillion Real Growth Rate?

GDP Growth Rate Real 2020 = $20 trillion 2021 = $22 GDP Growth Rate Real 2020 = $20 trillion 2021 = $22.4 trillion Real Growth Rate? ($22.4-$20)/$20 = .12 12% real growth

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Labor Force = ____________

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Labor Force = 5,350

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Unemployment Rate = ______________

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Unemployment Rate = 6.54%

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Labor Force Participation Rate = _______

Calculate Population = 10,000 Population 16+ = 8,000 Employed Persons = 5,000 Unemployed Persons = 350 --------------------------------------------------------- Labor Force Participation Rate = 66.88%

Expansion

What is the GDP formula?

What is the largest component of US GDP?

Looking at National Income (income method of GDP), what is the largest component? Rent + Wage + Profit + Interest

Give an example of an intermediate good.

Name two things that don’t count in GDP other than intermediate goods.

Where is residential housing counted in GDP?

Which component of GDP actually increased during the Great Recession? C, I, or G

Specifically, what goes on the y-axis on a typical business cycle graph?

According to the circular flow model, who sells all 4 of the factors of production?

Give an example of a leakage from the circular flow model. Hint government financial institutions foreign countries

Give an example of an injection in the circular flow model. Hint government financial institutions foreign countries

Minimum age in labor force

Employed + Unemployed

Requirements to be unemployed

Loss of job due to technological advancements

Lack of job due to search process

Loss of job due to contraction

Trough

Natural Rate of Unemployment is the sum of these two unemployment types

Current Natural Rate estimate by Fed

Joes Pizza updated its signs with masking tape labels when flour prices jumped

“Fixed Basket” inflation based on prices paid by consumers

Inflation basket based on spending patterns (variable basket)

Cost of more trips to the bank during inflationary period

Inflation type- Decrease AS

Contraction with Inflation

Base Year Index Value

Who benefits from unanticipated inflation Variable Rate Lender Variable Rate Borrower Fixed Rate Lender Fixed Rate Borrower

Inflation caused by increase in AD?

Contraction length to reach recession

Current Unemployment Rate (January Jobs Report)

Peak

US GDP to nearest trillion

Decrease in Price Level

Real GDP