Economics Chapter 14 Review
a depression
A severe recession with high unemployment, acute shortages, and excess manufacturing capacity is known as
technologically unemployed
A telephone receptionist loses his job when a computerized voice mail system is installed at his office. He is
cyclical unemployment
During swings in the business cycle, _____________ may increase because certain industries will lay off workers until the business climate improves.
creeping
During the late 1990s, the United States experienced ________ inflation, at a rate of about 3 percent per year.
rise
Economists calculate the inflation rate by dividing the _________ in price level by the beginning price level and multiplying by 100.
unemployment rate
Ideally, the ________ will remain under 5%, which indicates nearly full employment.
a diagonal line
If all families received exactly the same income, the Lorenz curve would appear as
galloping inflation
If inflation reaches 100 to 300 percent, the economy is in a state of _____________.
depression
If the economy reaches a state in which large numbers of people are out of work, there are shortages of consumer products, and manufacturing plants sit idle, it is clear that the economy is in a __________.
rate
Inflation can cause the _______ of income to change.
enterprise zones
Many cities establish ________ to encourage businesses to locate in poorer sections of the region so that jobs will become available to the working poor.
workfare
Many states have set up ________, programs that require people receiving welfare to provide labor in exchange for benefits.
implicit
The CPI, ______ GDP price deflator, and producer price index can all be used to measure inflation.
Lorenz
The ________ curve shows how much the actual distribution of income varies from an equal distribution of income.
welfare
The broad term for economic and social programs that provide regular assistance for people in need is _________.
fifths
The distribution of income is measured by ranking family incomes from lowest to highest, and then dividing the ranking into _________.
food stamps
The government issues ________ to ensure that people living in poverty receive enough food to eat.
grown
The income gap has ________ since the 1980s.
a growth in monopoly power
The income gap has widened since 1980 for all of the following reasons EXCEPT
is used to predict changes in business cycles
The index of leading indicators
some workers are "between jobs" for one reason or another.
The unemployment rate understates employment conditions for all of the following reasons EXCEPT
education
The unequal distribution of income is caused by __________ levels, wealth, discrimination, ability, and monopoly power.
his or her income is below a certain level
To an economist, an individual is living in poverty if
5%
To an economist, full employment is reached when the unemployment rate drops below
recession and expansion
What are the two phases of the business cycle?
seasonally unemployed
When a construction worker cannot work because of a winter snowstorm, he is
recession
When the GDP declines for six months in a row, economists know the economy is in a _________.
massive government spending for wartime goods
Which of the following factors did NOT contribute to the Great Depression?
economic growth
Which of the following is NOT a reason for income inequality?
deflation
a decrease in the general price level
workfare
a program that requires welfare recipients to provide labor in exchange for benefits
poverty guidelines
annual dollar amounts used to evaluate the money income that families and unrelated individuals receive
welfare
economic and social programs that provide regular assistance from the government or private agencies because of need
food stamps
government-issued coupons that can be redeemed for food
Lorenz curve
graph that illustrates how much the actual distribution of income varies from an equal distribution
creeping inflation
inflation in the range of 1 to 3 percent per year
hyperinflation
inflation in the range of 500 percent a year and above
galloping inflation
intense form of inflation that can go as high as 100 to 300 percent per year
business fluctuations
nonsystematic upturns and downturns of real GDP
unemployment rate
number of unemployed persons divided by the total number of persons in the civilian labor force
structural unemployment
occurs when a fundamental change in the operations of the economy reduces the demand for workers and their skills
technological unemployment
occurs when workers will less skills, talent, or education are replaced by machines that do their jobs
recession
period during which real GDP declines for two quarters in a row, or six consecutive months
trough
point in the business cycle when real GDP stops decreasing
peak
point in the business cycle when real GDP stops increasing
price level
the relative magnitude of prices at one point in time
divide the change in the price level by the beginning price level and multiply by 100.
to calculate the inflation rate, economists
frictional unemployment
unemployment caused by workers who are "between jobs"
cyclical unemployment
unemployment directly related to swings in the business cycle
cost push
An economist who attributes inflation to the increasing prices of producer inputs is holding to the _________ theory of inflation.
more than 30 million
About how many Americans are currently living in poverty?
demand-pull effect
According to the excessive monetary growth theory of inflation, extra money in the economy is spend, leading to a
expansion
After the GDP bottoms out, the economy moves into a period of _________, which is the second phase of the business cycle.
interest rates decrease
All of the following are consequences of inflation EXCEPT
cost-pull.
All of the following are theories regarding the cause of inflation EXCEPT
business fluctuations
All of the following factors contribute to business cycles EXCEPT
deflation
Although ________ is very rare, prices of goods did decrease during the Great Depression.
cyclically unemployed
An assembly line worker in an automobile plant is laid off during a recession. She is
wage-price spiral theory of inflation
An economist who attributes inflation to no single group is holding to the
business cycles
systematic upturns and downturns of real GDP