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Lecture 16
Lecture 16
Lecture 16
Lecture 16
Lecture 16
100
A trade deficit causes a country's income to rise or fall?
Fall
100
What drives potential GDP up (even during a recession)?
Labor force and Labor productivity keep climbing.
100
What determines how fast capacity grows?
Labor Force x Labor Productivity
100
What does the unemployment rate do?
Flat.
100
Can output grow faster than capacity?
Yes, for a little while.
200
If output is up 2% and prices are up 3%, nominal Gross Domestic Product is up by how much? What is the real GDP?
5%. The real GDP is the same as the output (2%).
200
The U.S. spends way more time expanding or contracting?
Expanding.
200
What three things drive up labor productivity?
Labor training, Capital stock growth and technology.
200
If output grows at 1% in the U.S., employment will go up or down?
Up.
200
When is output growing faster than capacity likely to occur?
In early recovery.
300
A 4% increase in pay coupled with a 3% increase in prices results in a real wage increase of what?
1%
300
The U.S. has way more expansions than recessions, true or false?
False, it has an equal number but an unequal duration of both.
300
What three things drive up labor productivity in China?
Labor training, capital stock growth and technology.
300
If output grows at 1% in the U.S., unemployment will go up or down?
Up.
300
What is a good year?
When output is growing faster than capacity.
400
Interest rate of 4% and inflation rate of 5% results in a real rate of what?
-1%
400
In the 20th century, output and capacity grew at an average of what percent?
3.3%
400
Why has growth been slower over the last decade?
Both Labor Force and Labor Productivity are growing more slowly.
400
If output grows at 1% in the U.S., both employment and unemployment will go up, does that make sense?
Yes, if the hiring does not keep up with the Labor Force.
400
What does unemployment do when output grows faster than capacity?
It goes down.
500
A decline in real GDP of how many quarters will result in an official govt. declaration of a recession?
2 consecutive quarters.
500
Lately the rate of the average of output and capacity growth has been closer to what actual percentage?
2.5%
500
what is an average growth year for the U.S.?
2-3% of output growth.
500
Can output be greater than capacity?
No.