Econ test 2

The labor force participation rate equals the

(labor force divided by working-age population) × 100.

During the expansion phase of the business cycle, which of the following eventually increases?

) Unemployment

If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?

3.5%

0.8% Real interest rate = Nominal interest rate - Inflation rate

If a 3-month Treasury bill pays 5.5% and the change in the consumer price index (CPI) is 4.7%, what is the real interest rate (the true return to lending)?

real GDP =

Productivity X Average Hours X EPR X Population

frictional unemployment

The advice to "keep searching, there are plenty of jobs around here for which you are qualified,"

Globalization

When people and organizations around the world begin to connect through business, economics, and social issues

Define Aggregate Planned Expenditure

the sum of planned levels of C + G + I + X - M

capital per worker =

total capital stock / total employment

average hours=

total hours / divided by total employment

output per hour=

total output / total hours worked