Cheatography

# ECON 20210 Cheat Sheet (DRAFT) by brennanhking

Study Sheet for ECON 20210

This is a draft cheat sheet. It is a work in progress and is not finished yet.

### Aggregates - GDP

 Definition of GDP: the total value of final goods produced and services provided on a given territory during a given period at the market prices.

### Aggregates - GNP

 Definition of GNP: the total value of final goods produced and services provided by citizens of a given nation during a given period at market prices.

### Aggregates - dichot­omies

 Flux: Stock: An amount of change in a quantity during a given period. Example: GDP. A quantity that accumu­lates over time. A definite quantity. Example: The national debt. Gross: Net: Gross refers to a total amount made but doesn't account for expenses, losses, etc. Ex: GDP includes deprec­iation A quantity including deduct­ions. Ex: NDP = GDP - deprec­iation. Net income = revenue - costs, taxes, interest, etc. Real: Nominal: The real value of a figure is its value in terms of some other good, service or bundle of goods. Ex: Real GDP is current GDP relative to the prices of some base year. The value of a good in terms of money. Ex: 2012 U.S GDP was \$16 trillion.

### Aggregates - Measur­ements of GDP

 GDP: f(Kt,N­t,At) wtNt+(­rt+­d)K­t+PIt Ct + Gt + Xt + It Kt = capital. Machines, factories, etc. Nt = labor, hours people work At = Produc­tivity. How productive is this territory wt = wages, employee compen­sation rt = rate of interest d = deprec­iation PIt = profits Ct = consum­ption It = Gross investment = Kt.1 - Kt(1-d). Net Investment = Kt.1 - Kt Gt = Government expend­iture Xt = net exports = exp - imports

### A - How do we detrend a variable and why?

 So that we can better observe the cyclical component of the data. Example: GDP is constantly growing but if we detrend we can better observe the cyclical component of the data. We can use techniques such as an HP filter to detrend.

### A - Popula­tions and Unempl­oyment

 Popula­tion: Includes labor force and everyone else. Labor force: Includes unemployed and employed. employed: Currently working Unempl­oyed: - Of working age

### Aggregates - Inflation

 Inflation: The rate at which the general level of prices for goods and services is rising, and, subseq­uently, purchasing power is falling. Can be approx­imated using: gdp deflator = nominal gdp/real gdp * 100. and