ch 17 econ

An economy's potential output level is:

the output that is possible when all resources are fully employed

output gap formula

((actual aggregate output - potential output)/potential output) X 100

If an economy has a positive output gap of 1.5%, this means:

gdp is 1.5% above potiential gdp

According to Okun's rule of thumb, for every 1% fall in the actual output below potential output, the unemployment rate:

rises by 0.5%

Which economic indicator tells you about the future expected profits of businesses?

s&p 500

Which economic indicator tells you how fast wages and benefits are rising?

employee cost index

The four stages of the business cycle are

expansion, peak, recession, trough

The Great Moderation refers to the:

increased volatility in the u.s economy

Which of the following is a broad indicator?

real gross domestic income

Refer to the data dashboard shown. Which indicator tells you how fast wages and benefits are rising?

employment cost index

Which of the following will probably rise when the economy is in a recession?

initial unemployment claims

Which of the following correctly describes the business cycle?

it is the fluctuations of gdp around potential output

Suppose that an economy is in a recession. You would expect to see the unemployment rate:

rise above the equilibrium rate

based on okra's rule of thumb, if you forecast that the output gap will decline from 0% to -3%, the unemployment rate will

rise by 1.5%

What kind of data adjustment removes the effect of sales spikes due to the holiday season?

seasonally adjusted data

which of the following will fall when the economy is expanding

applications for unemployment benefits

Which of the following is a narrow indicator?

the stock price for jpmorgan & co

Refer to the data dashboard shown. Which indicator is a cross-check on GDP?

real gdi

An example of a leading indicator is:

the stock market