Chapter 13 Econ Test

How did business cycles change after World War II?

Recessions became shorter and periods of expansion became longer.

a shift toward a decrease in unemployment

economic indicator would most likely indicate an upcoming economic expansion?

Stops the economy from growing and turn an expansion into a contraction.

external shocks

Which type of unemployment is natural in a free market economy, where workers have the freedom to change occupations?

frictional unemployment

demand-push

not a cause of inflation

The Federal Deposit Insurance Corporation (FDIC) was created to ____.

provide modest bank insurance for depositors

A decline in real GDP lasting at least two quarters or more is called a ____.

recession

6. What is the first step in constructing a price index?

select a representative selection of commonly purchased goods and services

Inflation

tempts some people to speculate in an attempt to take advantage of rising prices.

a period during which real GDP declines for at least two quarters in a row

the first phase of a business cycle

consumer price index

tracks monthly changes in prices paid by urban consumers

NOT a form of unemployment

underemployment

cost-push inflation

A sudden rise in the price of cotton raises the price of clothing and household products.

Which group has the highest unemployment rate in the U.S.?

African Americans

What does a trough indicate?

The GDP has stopped declining and has begun to increase.

How are the effects of U.S. inflation rates felt around the world?

U.S. inflation makes U.S. exports more expensive overseas.

A person would not included in the civilian labor force?

an army general who works in Washington, D.C.

A period of recovery from a recession is known as _____.

an expansion