Inflation
What is Inflation
What is How much the price level of goods and services go up over a period of time
What is unemployment
What is a person able to have a job, looking for a job but not having one
What is the expenditure approach
C+I+G+NX=GDP
What are the 4 phases of the business cycle?
Expansion, Peak, Contraction, Trough
A sustained drop in the price level
What is Deflation?
People who can not find a job and have given up searching
What is discouraged workers?
What are the 3 form of GDP?
Nominal GDP
Real GDP
Real GDP per Capita
What is a recession? (How long does it have to last?)
A contraction lasting over 6 months
What tool do economist use to measure inflation
What is CPI
What is considered a healthy Unemployment Rate
What is 4-6%
BMW made a brand new car in a factory in Berlin, Germany. Greg an American bought it. Would this count towards USA GDP
NO
What is stagflation?
Drop in GDP but rising inflation
Three main causes of inflation
What is Demand-pull, Cost-Push, and Quantity Theory
What are the 4 types of unemployment
What is Frictional, Seasonal, Structural, Cyclical
Why is a restaurant buying ingredients not counted in GDP
Because those are intermediary goods
What happens to unemployment at the peak?
What happens to unemployment at the trough
Lowest it will be
Highest it will be
Inflation that is out of control to the point that money loses a lot of value and the economy crashes
What is Hyperinflation
The number of unemployed individuals divided by the total number of persons in the labor force.
What is unemployment rate?
Why do economist use Real GDP over Nominal GDP
Because it adjusts for inflation
What role does the Federal Reserve have in the business Cycle?
Controlling interest rates to either incentives spending or slow it down.