Midterm Exam - Chapter 17 & 18 Flashcards
(17 cards)
What is included in the GDP deflator?
The broadest index used to measure inflation. It includes the prices for all goods and services in the economy.
What is inflation?
Inflation is the general rise in prices throughout the economy, Prices for individual goods can fluctuate up or down, but the price level captures the overall trend in the movement of prices.
What is disinflation?
Disinflation is the reduction in the rate of inflation. An economy experiencing disinflation still faces inflation, but at a declining rate.
Who is included in the BLS definition of unemployment?
People are counted as unemployed if they do not have a job but are available for work and have been actively seeking work for the previous four weeks
Who is included in the BLS definition of employment?
People are counted as employed if they have done any work at all for pay or profit during the survey week.
What is the unemployment rate?
The unemployment rate is the number of unemployed divided by the labor force.
Who conducts the household survey?
The Census Bureau
What is cyclical, structural and frictional unemployment?
Cyclical unemployment is the result of changes in the business cycle. Structural unemployment is caused by changes in the structure of consumer demands or technology. This requires retraining. Frictional unemployment is the short term duration unemployment caused be workers switching jobs.
What is the Rule of 70?
Provides an estimate of the number of years for a value to double and is calculated as 70 divided by the annual growth rate.
What is included in Human Capital?
Skills, knowledge and the overall quality of workers.
What is role of technology in economic growth?
Improving productivity, raising standard of living and increasing economic growth.
What is included in land resources?
Land and any raw resources that come from land (mineral deposits, oil, natural gas and water).
What is the capital to labor ratio?
The capital employed per worker. The higher ratio means higher labor productivity and as a result, higher wages.
What increased productivity?
Achieving more land or natural resources, growth of the labor force, increasing the quality of the labor force, increasing capital to labor ratio and improvements in technology
How does the government impact economic growth?
1). By investing heavily in capital goods, the government promotes a higher level of labor productivity in the country. 2). Government also ensures that an effective legal system is in place to enforce contracts and to protect property right and that the financial system is stable. 3). Maintaining competitive and efficient markets and the freedom for firms and individual to pursue their interest.
What is infrastructure?
Infrastructure is the public capital of a nation, including transportation networks, power-generating plants and transmission facilities, public education, institutions, and other intangible resources such as property rights and a stable monetary environment.
What did the Rev. Thomas Malthus have to say?
Malthus argued that the origins of poverty were rooted in an unavoidable contradiction: population, when allowed to grow without limits increases geometrically while the food supply could only increase arithmetically.
