Economics Flashcards
(28 cards)
What is GDP?
Gross Domestic Product, the total value of all goods and services produced in a country over a specific time period.
True or False: Inflation is the rate at which the general level of prices for goods and services rises.
True
Fill in the blank: Unemployment is defined as the percentage of the labor force that is _____ but actively seeking employment.
jobless
What does productivity measure?
The efficiency of production, often measured as output per labor hour.
What is the formula for calculating GDP?
GDP = Consumption + Investment + Government Spending + (Exports - Imports)
What is the difference between nominal GDP and real GDP?
Nominal GDP is measured at current market prices, while real GDP is adjusted for inflation.
Multiple Choice: Which of the following is a common cause of inflation? A) Increased demand B) Decreased supply C) Both A and B
C) Both A and B
What is cyclical unemployment?
Unemployment that results from economic recessions and fluctuations in the business cycle.
True or False: A high unemployment rate indicates a healthy economy.
False
What are the main phases of the economic cycle?
Expansion, peak, contraction, and trough.
Fill in the blank: A period of economic decline is referred to as a _____ phase.
contraction
What is the relationship between inflation and purchasing power?
As inflation rises, purchasing power decreases.
Multiple Choice: Which type of unemployment occurs when workers’ skills do not match job requirements? A) Frictional B) Structural C) Seasonal
B) Structural
What does a GDP growth rate indicate?
The rate at which a country’s economy is growing or shrinking.
What is the natural rate of unemployment?
The level of unemployment that exists when the economy is at full employment, consisting of frictional and structural unemployment.
True or False: Productivity can be improved by investing in technology.
True
What is hyperinflation?
An extremely high and typically accelerating rate of inflation, often exceeding 50% per month.
Fill in the blank: The unemployment rate is calculated by dividing the number of unemployed people by the _____ and multiplying by 100.
labor force
What is a recession?
A significant decline in economic activity across the economy lasting more than a few months.
Multiple Choice: Which of the following is NOT a type of inflation? A) Demand-pull B) Cost-push C) Structural
C) Structural
True or False: Full employment means that everyone in the labor force has a job.
False
What is the significance of the Consumer Price Index (CPI)?
It measures changes in the price level of a basket of consumer goods and services, used to assess inflation.
What role do interest rates play in the economic cycle?
Interest rates influence borrowing and spending, affecting economic growth and inflation.
Fill in the blank: When an economy is in a _____ phase, it experiences growth and increased employment.
peak
