Random 1
What are the 4 components of growth as a whole?
-Labor
-Capital
-Human Capital
-Technological
Human Capital
The accumulated skill and knowledge of workers
Physical Capital
-Amount of money people have in savings/investments
-Plant and equipment used by firms in production, includes infrastructure (roads, public transit)
Expansion
Employment, income industrial production, and all sales increase resulting in a rising real gross domestic product
How is labor productivity grown?
-Physical capital per person
-Human capital per person
-Technology
Labor
-Number of people working
-Hours of work per worker
Contraction
Elements of expansion begin to decrease, becomes a recession when a significant decline in economic activity spreads through the Nation
Peak
The ultimate ceiling for economic expansion, begins a turning point
Compound Growth Rate equation:
GDP capita(1+r)^t
What happens if labor and population grows?
GDP per capita will increase but the productivity of individual workers may not be affected
Deficit
means that a nation, on net, is borrowed from abroad.
What is the yearly average inflation rate of the United States?
3.8%
Inflation
an overall increase in price measured over some combination of goods and services.
Natural rate of unemployment
Employment in a growing market-based economy will happen in context of laws and regulations that affect workers and employers
Trough
When economic contraction hits its worst
Surplus.
means that a nation, on balance, is lending money abroad and having an outflow of foreign investment.
Indexing is protection against what?
Inflation
unemployment equation
unemployed/labor force x 100
Cyclical unemployment
The business cycle where the economy moves in and out of recession
Unemployment
how many people do not have work but ARE presently looking for employment.
A(n) ________ is a tool that is useful in macroeconomic contexts.
identity
At what percentage of inflation is it considered hyperinflation?
20%-40%
What is the rate of unemployment in America at the end of 2022?
3.5%
True or False: Minimum wages and union contracts do not affect most workers in the U.S. economy
True
Steps to unemployment:
Fall in demand (lowers product price) → economy falls into recession → demand of labor declines → quantity of labor demand falls → UNEMPLOYMENT