GDP
Define GDP
What is... a way to measure economic success by looking at how many goods are produced
What are the four main types of unemployment.
Define at least TWO
Frictional
Cyclical
Structural
Seasonal
A general increase in prices across the economy
What does it mean to have a budget deficit
The government is spending more money than they have coming in
What is the law of Supply
As price goes up supply goes up
Which country has the highest GDP
The United States of America
What is the formula to calculate unemployment?
Total number of unemployed people/Total number of people in the labor force X 100
Provide three examples of discretionary spending
Military
education
veterans
research/science
Transportation
Law enforcement
Give one example of land, labor, and capital
Land- soil, water, actual land, sun, etc
Labor- Answers can vary
Capital- machines or human knowledge
Chevy buys metal to produce their cars. Is this included in GDP. Why or why not?
No- the metal is not a final product
What is one cause of inflation OTHER THAN printing too much money
When demand is too high
When the cost to produce has gone up so suppliers raise their prices to meet those costs
Last year Sydney made $30,000 and was taxed at 10%. Next year, she made $50,000 and was taxed 15%.
What type of tax is this?
Progressive tax
During a expansionary period GDP will rise and inflation will _________
Rise
What are the descriptors that go into calculating GDP (ie- what's included in GDP)
The cash value
of all FINAL products
produced in a country's borders
in a given year
What is a "normal" rate of unemployment
4-6%
Why does inflation discourage saving money
Money will not be worth as much later on so that encourages people to spend money instead of save
Who has to approve the federal budget
Congress
Chris owns a furniture store. He is expecting there to be a sale next week. What will happen to his supply TODAY?
It will go up
Name ONE limitation of GDP
Does not measure goods or services people make/do themselves
Does not count under the table wages
Does not measure quality of life
What is "natural" unemployment
Seasonal+Frictional+Structural
NO CYCLICAL
Identify one way to stop inflation
Raise taxes
decrease the money supply
raise interest rates
Price floors and price ceilings
Michigan has a $2 tax on cigarettes. What kind of tax is this?
Regressive tax
Describe opportunity cost and provide an example
The best opportunity forgone when you make a decision
For example- Ben decides to go to the gym and forgoes the opportunity to work for 3 hour