GDP
Nominal GDP
GDP measured in current prices/dollars.
Name the 4 areas in the business cycle.
Expansion, peak, contraction, trough
Give an example of hyperinflation.
Zimbabwe
Venezuela
Name 2 problems with the unemployment rate
Discouraged job seekers
Part-time workers who want full jobs
Inequalities
Underemployment -over qualified
Illegal labor
What are 3 causes of poverty?
changes if family structure
unequal treatment
where people live
Real GDP
GDP expressed in real, constant prices. This accounts for inflation
What are the four factors that drive the business cycle?
1. business investments
2. interest rates/credit
3. consumer expectations
4. external shocks
The Consumer Price Index (CPI) measures what and how does it do that?
Inflation
300 consumer goods basket
Name three groups that are NOT in the labor force
Military
Institutionalize (prison/hospital)
Under 16
Retired
Stay at home parent
Name 3 government programs that assist those in poverty
SNAP
Cash Assistance
Medical Assistance
Subsidized housing
Job Training
TANF- Temporary Assistance for Needy Families
Social Security
Unemployment
What are the four factors to determine GDP?
1.Consumer spending
2. Business investments
3. Government spending
4. Net Exports/Imports
What is stagflation?
stagnant/inflation
Inflation exceeding 5 % is ____________.
unstable and unpredictable
Name the 4 types of unemployment
1. frictional
2. structural
3. seasonal
4. cyclical
What is the difference between in kind benefits and cash assistance?
Food stamps, legal aid, medical benefits, SNAP, CHIP
Name three things that are not counted in the GDP.
Bonds, stocks, used goods, illegal activities
Difference between a recession and depression.
Recession - 6-18 months
Depression - years
What are the three main causes of inflation?
Quantity theory - too much printed money
Demand pull
Cost push
The Natural Unemployment rate is when _________ & _________ are the only forms of unemployment.
frictional
structural
What are the three economic goals of every country?
1. Promote Economic Growth
2. Limit Unemployment
3. Stable Prices (Limit Inflation)
Formula for GDP % change.
year 2 - year 1 / year 1 x 100
Name 2 recent business cycle troughs that led to recessions.
2008 - housing market
1970 - OPEC
1980's - credit jump
2001 - internet company crash and 9/11
Name 3 effects of inflation
Purchasing power decreases
Fixed income
Discourages savings and investing
Interest rates
Give 2 examples of structural unemployment
Technological advancements
Globalization
New resources discovered
What are the negative effects of deflation?
discourage consumer spending and investment
increase real debt
Lower wages
Layoffs
Weak economy