chapter 2

Question 1

Economic Measurement

Answer 1

Economic strength can be measured using economic indicators
* Gross domestic product (GDP)
* Inflation
* Interest rates
* Unemployment rate
* Stock and bond markets

Question 2

Gross domestic product (GDP)

Answer 2

is the market
value of all final products produced in a country
during a specific time period

Question 3

Inflation

Answer 3

is the general rise in prices throughout
an economy

Question 4

Inflation rate

Answer 4

is the rate of change in prices
calculated on a monthly or yearly basis

Question 5

*Consumer price index (CPI)

Answer 5

is a measure of
average prices paid by consumers for consumer
goods and services

Question 5

Deflation

Answer 5

is a general decline in prices
throughout an economy

Question 6

Interest

Answer 6

is the amount a borrower pays to a lender for a loan

Question 7

Interest rate

Answer 7

represents the cost of a loan and is expressed as a percent of the
amount borrowed

Question 8

Labor force

Answer 8

is all the people in a nation who are
capable of working and want to work

Question 9

Unemployment rate

Answer 9

is the percentage of the
civilian labor force that is unemployed

Question 9

• Full employment

Answer 9

is when every person willing
and able to work has a job

Question 10

Productivity

Answer 10

is a measure of a worker’s
production in a specific amount of time,
such as an hour, a day, or a week

Question 11

Specialization

Answer 11

is focusing on the
production of specific goods so that more
products can be produced with the same
amount of labor

Question 12

Stock market

Answer 12

is a system and
marketplace for buying and selling
stocks

Question 13

Bond

Answer 13

is a certificate of debt issued
by an organization or government