alpha Flashcards
memorize (50 cards)
What type of unemployment occurs when you quit your job due to dissatisfaction with your wage?
Fictional
Which of the following is included in the calculation of U.S. GDP? I. The value of movies made in Africa by U.S. citizens. II. The value of olive oil made in Italy and sold in the U.S. III. The value of blue jeans made in the U.S. and sold in Japan. IV. The value of wine made in the U.S. by Canadian citizens.
III and IV
An increase in nominal GDP could result from an increase in?
I. Production
Il. Prices
IlI. Taxes
I and II only
What is an important difference between the GDP deflator and the consumer price index?
The GDP deflator reflects the prices of all goods and services produced domestically, whereas the consumer price index reflects the prices of goods and services bought by consumers.
What would be counted as investment when calculating gross domestic product?
The construction of a new house
Use the GDP Deflator to compute the real GDP in the year 2029 if Nominal GDP is $104 billion and GDP Deflator is 121.
86
What is the misery index useful for?
Comparing economic well being across countries and time periods
Why does the introduction of new goods and services in the economy cause the CPI to overestimate the cost of living?
When a new good is introduced, it gives consumers greater choice, thus reducing the amount they must spend to maintain their standard of living.
What does an economic recession produce?
An increase in cyclical unemployment
Given a total population of 2000, total employed adults of 950, and total unemployed adults of 500, what is the labor force?
1450
What type of inflation is initiated by increases in wages and other resource prices?
Cost-Push inflation
If the GDP Deflator in 2011 was 97 using 2010 as the base year, what must be true?
The inflation rate in 2011 was negative
How is investment defined?
The purchase of new capital goods by firms
Which statement exemplifies the concept of structural unemployment?
Workers are fired because their skills are no longer in demand
When the actual inflation rate is greater than the anticipated inflation rate, who is most likely to suffer?
Those who lend at a fixed interest rate
If Jose is 22 years old, available to work but has made no effort to find a job for the last six months, how is he classified?
Not in the labor force
If real GDP in year 1 is $5000 and in year 2 is $5,200, what can be said?
Output has increased by 4%
If a factory added $5,000 worth of output this year but caused $1,000 worth of loss to waterways, what happens to GDP?
Increase by $5,000
At what annual inflation rate would Arthur be indifferent between receiving $1,000 today or $1,050 one year from today?
5%
What is the real interest rate?
The interest rate corrected for the rate of inflation
During a recession, what is true about real GDP?
Real GDP is less than potential GDP
How is the inflation rate defined?
The percentage change in the price level from the previous period
If Inkiad’s 2015 salary was $107,000 and the price index in 2015 is 238, while in 2020 it is 260, what is his 2015 salary in 2020 dollars?
$116,891
In the CPI, what is the base year?
The benchmark against which other years are compared
