Macroeconomics: Supply, Demand, Inflation, and GDP
Intro macro flashcards — GDP components, inflation measures, AD/AS shifts, and policy basics.
12 cards· by GuruOwl
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Try it- 01What is GDP (expenditure approach components)?Y = C + I + G + (X − M): consumption, investment, government spending, net exports.gdp
- 02Nominal vs real GDP?Nominal uses current prices; real uses constant base-year prices to isolate quantity changes.gdp
- 03What is inflation?A sustained increase in the general price level (often measured by CPI or PCE).inflation
- 04CPI measures what?Price changes for a basket of goods/services typically purchased by urban consumers.inflation
- 05What shifts aggregate demand right?Higher C/I/G/NX — e.g., tax cuts, more government spending, easier monetary policy, export boom.ad-as
- 06What is a supply shock (negative) on AS?Left shift of short-run AS — higher input costs (oil), can raise prices and lower output (stagflation risk).ad-as
- 07Unemployment rate definition?Unemployed / labor force × 100; labor force = employed + unemployed (actively seeking).labor
- 08Frictional vs structural vs cyclical unemployment?Frictional: job search transitions. Structural: skill/location mismatch. Cyclical: demand shortfall in recessions.labor
- 09Expansionary monetary policy tools (conventional sketch)?Lower policy rates / increase money supply → stimulate investment and AD.policy
- 10Expansionary fiscal policy sketch?Increase G and/or cut taxes to raise AD; may raise deficits.policy
- 11What is potential output / full employment output?The sustainable output level when resources are fully employed (natural rate of unemployment).ad-as
- 12Opportunity cost in one line?The value of the next-best alternative foregone when a choice is made.basics