Business Cycle & CFM
The period of growth in Real GDP following an economic trough.
What is an expansion/recovery?
This consumer market basket approach helps determine the inflation rate by comparing past year prices with current prices.
What is the Consumer Price Index or CPI?
This is what GDP stands for.
What is Gross Domestic Product?
The type of unemployment that results from new workers looking for their first job.
What is Frictional Unemployment?
What is the wage-price spiral?
Cycle in which increased wages lead to higher production costs, and so on, and so on.
Period of 6 months or two business quarters of decline in Real GDP.
What is a recession?
When GDP is adjusted for inflation it is referred to as THIS type of GDP.
What is real?
This is GDP per person.
What is GDP Per Capita?
The unemployment caused by a recession or downturn in the economy.
What is cyclical unemployment.
Three goals of any economy.
What are full employment, price stability, economic growth (increase GDP)?
What is at the center of the circular flow model?
When prices rise workers need an adjustment in wages/income to avoid the loss of purchasing power. This adjustment in pay to reflect inflation is called a what?
What is a cost-of-living adjustment?
The largest category of GDP.
What is consumer spending?
Bobby has lost his job on the factory line because robotic workers are being employed to replace him. His skills are no longer needed. What type of unemployment is this?
What is Structural Unemployment?
Population: 10
Employed: 6
Unemployed: 2
what's the labor force participation rate??
8/10 = 80%
The phase of the business cycle when unemployment is at its low and inflation is at its highest.
What is the peak?
When there is a very small rate of inflation (0-1%) is is called this.
What is disinflation?
GDP only counts final goods, it does not count non-production transactions, non-market goods, or these goods... used in the process of making other goods.
What are INTERMEDIATE goods?
The Natural Rate of Unemployment (NRU) is made by adding together which two components?
Frictional & Structural Unemployment
Type of inflation caused by a supply shock, or when there is a problem with supply-side?
What is cost-push inflation?
The part of the Circular Flow Model where households provide services in exchange for wages is called...
Factor Market
When the CPI is 121 in the current year and it was 100 in the base year... THIS is the inflation rate.
What is 21%?
The four categories included in the expenditure approach of GDP calculation.
What are consumer spending, business investment, government spending, and net exports?
Population: 10
Employed: 6
Unemployed: 2
what's the unemployment rate?
2/8 = 25%!
Workers who have given up and are no longer counted as part of the workforce are called...
Discouraged Workers