Economic Growth
Alternating period of economic expansion and contraction
The Business Cycle
What is considered a healthy unemployment rate?
Under 6%
An increase in prices of products and services without increases employee wages
Inflation
y = c + i + g + (x - m)
Nominal GDP
1 US Dollar (USD) = 0.90 Euros (EUR) is an example of?
Exchange Rate
Used to measure economic growth with current market prices
Nominal GDP
Requirements to be unemployed (5 of them)
16 years or older
Not in jail
No paid jobs in time period
Seeking employment
Not a full time student
What is CPI?
The value of a market basket of goods and services
What is the equation for calculating unemployment rate?
# unemployed / labor force x 100
The quantity of goods and services that a unit of currency can buy
Purchasing Power
Identify the GDP sector:
Bill purchases a new stove for his family
Consumption
What is considered to be the labor force?
Unemployed AND employed
What is a healthy unemployment rate?
Under 6%
Current Value of market basket / Base year Market basket value x 100 =
CPI
What does PPP stand for and what is it?
Purchasing Power Parity
Theory that states identical goods should cost the same in different countries when adjusting exchange rates to the same currency
Identify the GDP sector:
Starbucks purchases land for a new franchise to open
Business Investment
What are the 4 unemployment types?
Frictional
Structural
Seasonal
Cyclical
Nominal GDP adjusts for inflation while Real GDP is based on current market prices
False
What is the Real GDP equation?
Nominal GDP / CPI x 100
By converting the average national Big Mac prices to U.S. dollars, the same goods can be informally compared. This is known as the....
Big Mac Index
Identify the GDP sector:
Janet purchases a bike she found on FB marketplace with cash.
Not in the GDP
Jill is a 14 year old girl who sometimes babysits for her neighbor. What category would she fit into?
Jill is not in the work force.
What does GDP per capita measure?
a measure of a country's economic output per person, adjusted for inflation. It provides a way to understand the average standard of living and economic well-being of people in a country.
What is the inflation rate equation?
New CPI - Old CPI / Old CPI x 100
A strong dollar is _____ for imports ____ for exports
A weak dollar is _____ for imports ____ for exports
Good / Bad
Bad / Good