Red
The highest point of expansion
Peak
A rise in per capita GDP signals what?
Growth in the economy and an increase in productivity
The amount of goods and services in the economy that will be purchased at all possible price levels
Aggregate demand
This type of unemployment is described as occurring when moving from one job to another and can be considered desirable.
Frictional
Per economist Mary Daly, what was the biggest problem with the Great Recession?
The large number of people who lost their job and were unable to find work for a long amount of time
This type of unemployment is described as existing due to industrial reorganization, typically the result of technological change and while is not desirable can be more predictable.
Structural
Assume that a nation’s GDP increased by 3%. What must be true?
Either productivity increased or available production inputs increased
List the four phases of the business cycle.
Peak, expansion, contraction, troughs
A sustained increase in the general level of prices for goods and services.
Inflation
What is the difference between nominal and real GDP?
Real GDP is adjusted for inflation or deflation, whereas nominal GDP is not
Bill is a construction worker who was laid off because the market for new homes has been adversely affected by the recession. Bill's unemployment is considered part of what type of unemployment?
Cyclical unemployment
What does GDP stand for?
Gross Domestic Product
When does inflation NOT have an effect on purchasing power?
When the price of all goods and wages rise by roughly the same amount
A period of decline in total output, income, employment and trade, usually lasting six months to a year and marked by widespread contractions in many sectors of the economy
recession
How is CPI determined?
By measuring the price of a standard group of goods meant to represent the “market basket” of a typical urban consumer
What is the most important determinant of a healthy economy?
GDP
According to the Bureau of Labor Statistics, an individual can only qualify as being unemployed after meeting what three criteria?
1. Must be currently jobless
2. Must be actively seeking work
3. Must be available to take a job
List the types of economic indicators.
Leading, lagging, and coincident
Name one 'group' that loses when there is inflation.
Those on a fixed income
Lenders
Savers
This type of unemployment is described as existing due to business fluctuations, such as recessions or depressions and is not desirable as it is unpredictable.
Cyclical
The lowest point of a recession.
Trough
When do economists full employment as occurring?
When cyclical unemployment does not exist
When a shortage of supply labor, raw materials, or capital drives up prices
Cost-push inflation
The total amount of goods and services in the economy available at all price levels.
Aggregate supply
When demand for a good or service increases so much that it becomes higher than the supply
Demand-pull inflation