Bernard 's AP Macroeconomics Blog

Population - number of people in a country . Labor force - number of people in a country a country that are classify as employed or unemployed. Employed - people who are 16 year of age or older that have a job . Unemployed - people who are 16 year of age or older who did not have a job , but have actively searching for a job in the last 2 weeks. Unemployment - failure to use a viable resources particularly labor to produce desire good and services. Unemployment rate:   # of unemployed/ Total labor force x 100 (# of employed + # of unemployed) 4 to 5% = unemployment rate Not in the labor force Students Retired People institutionalized (mental) Prisoners Military  Disabled People who given up looking for a job                                                        Type of Unemployment  Frictional - between jo...

Inflation - a general rise in the price level ( $1 can buy less in general than a $1 in the past due to inflation ) Deflation - decline in the general price level Disinflation - occurs when the inflation rate it self declines. Real interest rate-  the cost of borrowing or lending money that has been adjusted for inflation(%) Nominal interest rate-   expected rate of inflation Nominal interest rate-   the un-adjusted cost of borrowing money (real interest rate+ expected rate of inflation) Inflation rate  new year - old year / old year x100                                         Demand(pull inflation ) vs Cost(push inflation) Demand - to many dollars chasing too few goods Trigger by an increased of aggregate demand  Output and employment rise while the price level is rising Spending increase faster then production  Cost push ...

Gross Domestic Product (GDP) - Total market value of all final goods and services produce within the country border within a given year . Gross Natural Product(GNP)  - It's a measure what the citizens product and whether they produce these items in their border. C= Consumption Expenditures(67%) IG= Gross Private Domestic Investment(17%) G= Government Spending (20%) Xn= Net Exports(exports-imports)(-4%) C+IG+G+Xn=GDP IG Factor equipment maintenance  New  factor equipment  Construction of housing  Unsold inventory of product built in a year                                            Not Counted in GDP Used or second second hand goods - avoid double or multiple counting  Gifts or transfer payments (Public- social security, welfare or Private- scholarships ) Stocks or bonds ( not counted ) Purely financial transaction , Their is...

Circular Flow - Shows the flow of money goods and services and factor of production throughout the economy . 3 entries  Household - person or group of people who share income. Household owns the Factor of Production  Firms - is an organization that produces goods and services . Firms produce goods by taking imports, which is your FOP product and turning them into output , which is your finished product. Government - Their provider of public goods and services and demanders of both private good and services and the factor of production. 2 market  Product market - this is where goods and services are bought and sold ; exchange finish good for money  Factor market(Resource market) - where resources especially capital and labor are bought and sold . Exchange factor of production for money. 

Business Cycle - fluctuation in economic activity that an economy experiences over a period of time.  4 phases  Expansion - Spending increases ↑ Unemployment decreases ↓ best phase to be in ( ex . Construction ) Peak - The highest point of real GDP greatest spending lowest unemployment, however inflation becomes a problem. Contraction/Recession - real GDP decline for 6 months (reduction of spending level , increase in unemployment) Trough - lowest point of real GDP least amount of spending highest unemployment.