Miscellaneous
The definition of Macroeconomics
What is the study of the large economy
as a whole?
The time period in which Macroeconomics was born in.
What is The Great Depression?
Define unemployment.
What are Workers that are actively looking for a job but aren’t working?
Define inflation.
What is rising general level of prices and it reduces the “purchasing power” of money?
Define structural unemployment.
What is changes in the labor force make some skills obsolete?
Reasons Macroeconomics was created.
What is
Measure the health of the whole economy.
Guide policies to fix problems?
Who is in the Labor Force?
What is At least 16 years old, able and willing to work, not institutionalized (in jails or hospitals), and not in military, in school full time, or retired?
Who is hurt by inflation?
What is lenders, people with fixed incomes, and savers?
Define intermediate goods.
What is goods inside the final goods don’t count?
The three macroeconomic goals for any country.
What is Promote Economic Growth, Limit Unemployment, and Keep Prices Stable (Limit Inflation)?
Employed, unemployed, or does not count: A college student working a part-time job.
What is employed?
The two ways inflation is measured over time
What is the inflation rate and price indices?
Why is the Rule of Law connected to economic growth?
What is Countries with solid institutions and political stability have historically had more economic growth?
Define Gross Domestic Product in detail (Explain what each part of the definition means!)
What is
Dollar value- GDP is measured in dollars.
-Final goods- GDP only counts NEW goods and services
-Within a country- GDP measures production within the country’s borders
-One Year- GDP measures annual economic performance?
Dave is looking for a job after recent budget cuts. The type of unemployment Dave would fall under is...
What is frictional unemployment?
Name two scenarios where inflation has affected your family in 2022.
What is answers will vary?
Evaluate the benefits of capitalism.
What is promotes innovation and provides incentives to improve productivity?
Describe at least three components of Gross Domestic Product.
What is
Consumer Spending- ≈ 70% of U.S. GDP Purchases of final goods and services by individuals. Ex: $5 Sandwich at Subway
Business Investment- ≈ 16% of U.S. GDP
Businesses spending on tools and equipment.
Government Spending- ≈ 17% of U.S. GDP
Net Exports- Exports (X) – Imports (M) ≈ -3%
Discuss ALL the criticisms of the unemployment rate.
What is
Some people are no longer looking for a job because they have given up.
If people leave labor force the unemployment rate falls
Underemployed Workers-
Someone who wants more hours but can’t get them is still considered employed.
Race/Age Inequalities-
The overall unemployment rate doesn’t show disparity for minorities and teenagers.
Explain two criticisms of the Consumer Price Index (CPI)?
What is
Substitution Bias- As prices increase for the fixed market basket, consumers buy less of these products and more substitutes that may not be part of the market basket. (Result: CPI may be higher than what consumers are really paying.)
New Products- The CPI market basket may not include the newest consumer products. (Result: CPI measures prices but not the increase in choices.)
Product Quality- The CPI ignores both improvements and decline in product quality?
The equation for the Consumer Price Index.
What is CPI= Price of market basket/Price of market basket in base year x 100