Circular Flow Model
In the product market, what role do households play? (Q1)
Buyers
How do you calculate unemployment rates? (Q15)
Unemployed/labor force x 100
What is accounted for in the calculation of a country's GDP? (Q5)
Changes in inventory
Who benefits from expected inflation? (Q16)
Borrowers
What type of unemployment happens when technology makes certain jobs outdated? (Q13)
Structural unemployment.
Who supplies resources in the circular flow model? (Q1)
Households
What does GDP measure?
The total value of all goods and services produced in a country.
If only nominal GDP increases and real GDP stays the same, what happened to prices?
Prices increase
If nominal GDP falls while real GDP rises, what does this mean? (Q24)
Inflation is negative.
Is a laid-off sales associate who has given up looking for a new job considered unemployed? (Q12)
No
What is a leakage from the circular flow of economic activity? (Q2)
Saving
If real GDP is increasing at 3% per year and nominal GDP is increasing at 7% per year what could be happening? (Q25)
The price level is increasing
In a specified year, nominal GDP grew by 11% and real GDP grew by 4%, inflation for this year would be (Q22)
7%
If the consumer price index rises from 100 to 200, what does this mean? (Q21)
The prices in an average consumers market basket are doubled
What problem is not fully shown by the official unemployment rate? (Q9)
Discouraged workers
What side of the product market are Households on? (Q1)
Demand
What is the result of a rise in the general price level on nominal GDP?
Nominal GDP increases because it reflects current prices.
If nominal GDP goes up by 7% and real GDP goes up by 3%, what does this mean for inflation? (Q22)
Inflation is 4%.
What happens to real interest rates if actual inflation is less than expected inflation? (Q20)
Real interest rates are higher.
If 175,000 out of 200,000 people in the labor force are unemployed, what is the unemployment rate? (Q15)
87.5%