Unemployment
This is the type of unemployment results from being between jobs?
What is frictional unemployment
This component of GDP is considered the largest in the United States
What is C (Consumer Spending)
Select goods and services measured by CPI
What is a "Basket" of Goods?
A graph of the business cycle tracks this variable on the "trend line".
What is Full Employment or Potential Real GDP
The Circular Flow Model shows how money and resources are exchanged by these three economic "agents".
What is Households, Businesses and Government
A nation's unemployment rate is the ratio of unemployed seeking unemployment to this.
What is the Labor Force?
This must be identified in order to calculate Real GDP.
Deflator
CPI is used to calculate this economic indicator.
What is inflation?
A point above the "trend line" on a Business Cycle graph would represent what?
What is Inflationary Gap?
This economic agent supplies the factors of production (land, labor, capital) in the circular flow model.
What are Households?
A type of unemployment resulting from obsolete worker skill sets.
What is structural unemployment?
A "final" calculation of GDP does not include these types of goods(not services or production)
Hint:
The goods used to produce final goods
What are intermediate goods?
The CPI shows inflation in regards to this component of the GDP calculation.
What is consumer spending?
This is described as the gap below the trend line and an economic contraction.
What is a recessionary gap or unemployment gap?
Savings and Imports play this role in the "Circular Flow" of goods and services?
Leakages
This exists when the economy is experiencing no cyclical unemployment.
What is Full Unemployment?
Year 1 has a GDP deflator of 125 and Year 2(most recent) has a GDP deflator of 135, so this is the rate of inflation between Year 1 and Year 2.
What is 8%
(135-125)/125
These are two reasons why CPI is not a perfect indicator of economic behavior.
What are Consumer Substitutes, Goods Evolve and Changes in the Quality of Goods?
We would expect the CPI to increase and the GDP deflator to increase in this phase of the business cycle.
What is expansion?
Why are savings and Imports considered "leakages" in the Circular Flow model?
1)Savings are not spent on consumption
2)Funds used on Imports leave the country.
There are currently 180 million people in the labor force and 4% are unemployed. This will be the unemployment rate if 2 million people become discouraged workers. (round to the nearest tenth)
What is 2.9%
In 2016 the nominal GDP for a country was $400 billion and the deflator was 215, so this was the real GDP for 2016. (round to the nearest whole number)
$186 billion
215 = (400/real) x 100
In 2014 Kelsey's nominal income was $40,000, and it increased to $41,000 in 2015. The CPI during this time increased from 235 to 237. What was Kelsey's real wage change? Round to the tenth.
1.6 Percent increase
2.5 - 0.9
What 2 values can be used to calculate the Inflation Rate?
CPI
Deflator
Exchanges between the government and households that are not accounted for in GDP calculations.
What are transfer payments?