Ch. 5 Econ

Question 0

How do you calculate GDP

Answer 0

Personal consumption expenditures + gross private domestic investment + government purchases + net exports

Question 1

Definition of GDP

Answer 1

The total market value of all final goods and services produced annually within the U.S.

Question 2

When are net exports negative

Answer 2

When you import more than you export

Question 3

Are social security payments counted in the GDP

Answer 3

No

Question 4

Are used automobile purchases counted in the GDP

Answer 4

No

Question 5

Is a payment to a mechanic or lawyer counted in the GDP

Answer 5

Yes

Question 6

Is a restaurant buying cheese to make pizza counted in the GDP

Answer 6

No

Question 7

Are activities done in the underground economy counted in the GDP?

Answer 7

No

Question 8

Nominal GDP

Answer 8

Measured in terms of the price level at the time of measurement and is no adjusted for inflation

Question 9

Real GDP

Answer 9

Measured in terms of the price level in a base period and is adjusted for inflation

Question 10

What is GDP per capita

Answer 10

The GDP divided by population

Question 11

What are sticky prices

Answer 11

Situation where prices of goods and services are slow to respond to changes in supply and demand

Question 12

What are the four phases of the business cycle

Answer 12

Expansion, peak, recession, trough

Question 13

Definition of recession

Answer 13

A period of declining real GDP accompanied by lower income and higher unemployment

Question 14

What happens to unemployment during an expansion?

Recession?

Answer 14

Goes down

Goes up

Question 15

What happens to the real GDP in an expansion?

Recession?

Answer 15

Goes up

Goes down

Question 16

What are the four types of unemployment

Answer 16

Frictional
Cyclical
Structural
Seasonal

Question 17

Frictional unemployment

Answer 17

People who are temporarily between jobs

Question 18

Cyclical unemployment

Answer 18

Workers laid off in a recession

Question 19

Structural unemployment

Answer 19

Mismatch between qualifications and skills needed
Cannot get a job or replaced by machine
Most serious

Question 20

Seasonal unemployment

Answer 20

Workers not employed during parts of the year due to weather

Question 21

Are part time workers counted in the unemployment rate

Answer 21

No

Question 22

Are the underemployed counted in the unemployment rate

Answer 22

No

Question 23

Are hidden unemployed workers counted in the unemployment rate

Answer 23

No

Question 24

What would most economists consider full employment to be

Answer 24

5% | Everyone who wants a job has one

Question 25

How do you calculate relate of inflation

Answer 25

New minutes old divided by old times 100

Question 26

During inflation do consumers gain or lose buying power?

Answer 26

Lose

Question 27

What is the Consumer Price Index?

Answer 27

The measure of the changes in price of a market basket of some 300 goods and service purchased by typical urban consumers New divided by old times 100

Question 28

Stagflation

Answer 28

A period of stagnant growth combined with high inflation | High inflation and high unemployment

Question 29

Money illusion

Answer 29

Noting an increase in your salary but not noticing an increase in price level of goods and services

Question 30

How do you calculate the misery index?

Answer 30

Add inflation and unemployment

Question 31

What type of inflation occurs if everyone wants to buy a product

Answer 31

Demand pull

Question 32

What is cost push inflation

Answer 32

Inflation initiated by increases in wages or other resource prices

Question 33

Wage push and profit push inflation are examples of which type of inflation?

Answer 33

Cost push