Unemployment
Farmer Joe is unemployed during the summer because he cannot grow his crops. What type of unemployment is this?
Seasonal unemployment
What is the point on a business cycle graph where economic decline stops?
Trough
What is economic growth?
Social and economic goal aimed at increasing the production of goods and services over time/increase in Real GDP
What are the functions of a central bank?
The organization in charge of monetary policy or regulating the money supply
Who puts fiscal policy into place?
The Government
What is Gross Domestic Product?
The total of all final goods and services produced within a country in a given year
What is the general rising of prices called?
What is inflation?
When the economy enters a recession and you are fired because of it, what type of unemployment is it?
Cyclical unemployment
What is the point on a business cycle graph where economic growth stops?
Peak
What is price stability?
Social and economic goal aimed at limiting inflation to keep prices steady/prevent sudden and drastic changes to price levels
What are the two tools of monetary policy?
Interest rates and money supply
Tax revenue and government expenditure
What is GDP adjusted for inflation?
real GDP
What is CPI?
This measures inflation and is composed of a market basket of 400 goods and services that the average urban consumer buys yearly.
Your are let go from your company because a robot has taken over your job. What type on unemployment is this?
Structural unemployment?
What is the point on a business cycle graph where rGDP and employment increase?
Recovery/expansion
What is full employment
Social and Economic Goal aimed at keeping the unemployment rate as low as possible
What is one advantage of monetary policy
easily adjustable, short time lag
Capital or current expenditure
What is one thing that is not included in inflation
secondhand sales
intermediate goods
used goods
private transactions
public transfer payments
Black market transactions
What is stagflation?
When inflation is occurring in a recession
You are going to college in New York City and are taking the time to look for a job that fits your schedule. What kind of unemployment is this?
Frictional unemployment
What is the point on a business cycle where rGDP decreases and unemployment increases?
Contraction
What is the expenditure approach?
The total amount spent on goods and services from the categories of consumption, business investments, the government and net exports.
What is one disadvantage of monetary policy?
0% is the minimum, depends on confidence of households and firms
What is a budget deficit?
When the Federal Government is spending more money than they are receiving in revenue collection.
What is the largest sector of GDP?
Consumption Spending
People who lose from unanticipated inflation?
lenders, retired people, people on fixed incomes
Type of unemployment you cannot have if you are at full employment level
Cyclical unemployment
What do you call a downturn or bad time in the economy?
Recession
What is a budget surplus?
When the Government is bringing in more money in revenue collection than they are spending
Explain how monetary policy could be used to fix a recessionary gap
What is national debt?
When the government has borrowed to finance expenditure
What is the expenditure approach equation?
What is GDP = C + I + G + (X-M)
People who gain from unanticipated inflation?
borrowers, people with COLA's in their paychecks, people who buy real estate