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Unemployment
GDP
Business Cycle
RBA
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100
Carlton loses his job as a bank teller when the ATM is invented.
What is structural unemployment
100
What does GDP measure?
Growth and wealth of a nation's economy.
100
What is the highest point in the business cycle? Label it.
Peak
100

What does the RBA do?

Controls interest rates and the money supply

100

What is the CPI and what is it used for?

Consumer Price Index

The change in price of a basket of goods used to measure the rate of inflation

200
Johnny moves to Nashville after graduating from the University of Memphis to find a job. What type of unemployment is he experiencing?
Frictional unemployment
200
In order to count as GDP, products and services must be?
Produced in the United States within the year.
200
What is the lowest point in the business cycle where GDP is low and the unemployment rate is high? Label it.
The trough
200
What is the reserve requirement?
The percent of a customer's deposit that bank must keep in the vault.
200
What does inflation mean?
The overall price level has increased.
300
After the back-to-school rush in August, business dies down and Target lays off Joe
What is seasonal unemployment.
300
What is the formula for calculating GDP?
Consumption + Investment + Government Spending + Exports - Imports.
300
What is the point where GDP is increasing and the unemployment rate is decreasing? Label it.
Expansion
300
What is the discount rate?
The interest rate a bank charges on a loan.
300

What is the cause and effect of cost push inflation?

Price of raw materials used in production goes up and cost is passed on to consumers

400
In order to be unemployed, a person exhibit these 3 qualities
At least 16, out of work, actively searching for a job.
400
What does GDP Per Capita mean? What is the formula for calculating GDP per capita?
GDP per person in the country. GDP/total population
400
What is the point on the business cycle where GDP is decreasing and the unemployment rate is increasing? Label it.
Contraction
400
What can the Fed do to increase the money supply during a recession?
Decrease the reserve requirement and decrease discount rates.
400

What is the term for these?

When the government has higher revenues that expenditures

When that a government has higher expenditures than revenues

surplus and deficit

500
What is the formula for calculating the unemployment rate?
(Number of unemployed people/total population) x 100
500
List 3 DIFFERENT types of goods that would NOT be counted towards GDP?
Illegal goods, used goods, goods with no receipt
500
What is the difference between a recession and a depression?
A recession is when GDP decreases for 2 consecutive quarters. A depression is a SEVERE recession.
500
What type of budget does the Fed strive for? Give an example.
A balanced budget.
500

Explain how government quantitative easing (intervention to push economic activity) impacts inflation

1. Gov prints money, devalues currency, prices go up

2. Gov inject money in economy, more dollars chasing same amount of goods, prices go up