Business Quiz Chapter 2
Harmful to people on fixed incomes
Inflation
GDP
the total market value of all final goods and services produced annually in an economy
What is not included in GDP?
things you do for yourself, ex: mowing your lawn, building a swing set.
recovery
unemployment decreases, demand increases, GDP rises
When did the last depression in the US occur?
1930s-40s
2 ways to increase productivity
Better equipment and technology and employee training
prosperity
the peak in the business cycle, GDP increases, wages are good and demand is high
business cycle
The movement of an economy from one condition to another and back again
labor force
The total number of people who are actively working, above age 16
2 causes of inflation
rising material cost, rapid wage increase
capital projects
spending by businesses for items such as land, buildings, equipment, and new products.
bond
a certificate representing a promise to pay a definite amount of money at a stated interest rate on a specified due date.
deflation
a decrease in the general level of prices
Deflation
a decrease in the general level of prices, people have less money to buy products
GDP per capita
the output per person, calculated by dividing gross domestic product (GDP) by the total production.
4 components of GDP
consumer spending, business spending, government spending, exports minus imports
Inflation can occur when...
demand for goods is higher than the supply
recession
demand increases, unemployment rises, GDP slows for 2 or more quarters
Ripple Effect
one area of business effects another ex: less homes sold=less cars sold
When GDP is measured
only final goods are counted
stock
ownership in a corporation
People with poor credit ratings...
pay a higher interest rate
depression
prolonged period of high unemployment, GDP falls greater than 10%, 3+ years of recession.
Main cause of unemployment
reduced demand for goods and services
the sales of durable and nondurable goods bought by consumers
retail sales
