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Sue Holloway was an accountant in 1944 and earned 12,000 a year her son Josh Holloway is an accountant today and he earned 210,000 in 2013 the price index was 17.6 in 1944 and 218.4 in 2013 In real terms to Holloways income amounts about what percent of Josh Holloways income

70.9%

Absolute advantage

Ability to produce a good using fewer inputs and then another worker

Absolute advantage vs comparative advantage

Absolute advantage is different from comparative advantage because with absolute we are not looking at the opportunity cost for producing an alternative product we are comparing the quantities of inputs required by producers to reduce the same amount of a certain good

Changes in nominal GDP reflect

Both changes in prices and changes in the amounts being produced, refers to the production of goods and services valued at current prices

Some persons are counted out of the labor for us because they have made no serious or recent effort to look for work however some of these individuals may want to work even though they are too discouraged to make a serious effort to look for work if these individuals were counted as unemployed instead of out of the labor force than

Both unemployment rate in labor force participation rate would be higher

Real GDP

Changes in the amounts being produced not prices

Which of the following events must cause equilibrium price to fall

Demand decreases and supply increases

The unemployment rate is computed as the number of unemployed

Divided by the labor force all times 100, refers to the percentage of the labor force that is unemployed

Total output in an economy increases on each person specializes because

Each person spends more time producing that product in which he or she has a comparative advantage

The producer that requires a smaller quantity of inputs to produce a certain amount of a good relative to the quantities of input required by other producers to produce the same amount of that good

Has an absolute advantage in the production of that good

The consumer price index is used to

Monitor changes in the cost of living overtime, it is the measure of overall cost of goods and services brought by a typical customer

Equilibrium price on a supply demand curve

Price that balances the quantity supplied in the quantity demanded

The market demand curve

Represents the sum of quantities demanded by all the buyers at each price of the good Downward sloping

The GDP is defined as the

Value of all final goods and services produced within a country in a given period of time Measures income

Which of the following statements about real And nominal interest rate is correct

When the inflation rate is positive the Nominal interest rate is necessarily greater than the interest rate

The quantity demanded of a good is the amount that buyers are

Willing and able to purchase

The quantity supplied of a good is the amount that

sellers are willing and able to sell

The opportunity cost of an item is

what you give up to get that item