Final Review Exam 2

unemployment rate

(# of unmployed/ labor force) x 100

Labor Force Participation Rate

(Labor Force/Adult population) x 100

Government debt is approximately_________ percent of GDP

100%

working age

16

Consumption =

Disposable income - savings

The benefit of diversification when constructing portfolio is that it can eliminate:

Firm-specific risk

the Catch up effect

Poorer economies' per capita incomes will tend to grow at faster rates than richer economies.

which group has highest unemployment?

Teens.

S. Pri =

Y - T - C income, taxes, consumption

Frictional unemployment is when people

are out of work because they are changing jobs.

The traditional view of the production process is that capital is subject to

diminishing returns

The Bureau of labor statistics counts a person as unemployed if he or she is:

in the labor force but unable to find work.

an increase in the budget deficit will:

increase the real interest rate and decrease the quantity of loanable funds demanded for investment.

Efficient Market hypothesis

it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. (3 levels economies could be, really efficient or really inefficient.)

Standard of living is related to

labor productivity(like tech) and the proportion of the pop. that works.

Cyclical unemployment exists because:

there are periodic reductions in the economies total demand for goods and services.

Labor force

total workers, including employed and unemployed.

Structural Unemployment

unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.