Dynamic study guide

During recessions unemployment increases. This type of unemployment is known as __________.

cyclical unemployment

At full employment, __________.

cyclical unemployment is zero

Since the year 2000, the labor force participation rate for men __________ and the labor force participation rate for women __________.

decreased; decreased

Which of these groups is included in the labor force?

The unemployed

Suppose you are available for work but have not looked for a job for at least the last four weeks because you believe that no jobs are available. You would then be counted as __________.

a discouraged worker

Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics?

a new house

The labor force as a percentage of the working-age population is the

labor force participation rate

Gross domestic product is defined as the:

market value of all final goods and services produced in a country during a period of time

In measuring changes in the standard of living of a country, economists rely heavily on comparisons over time of real GDP per capita because:

despite its well-known flaws, it is the best means we have of comparing the performance of an economy over time

The best measure of the income households actually have available to spend is:

disposable personal income

Disposable personal income is equal to personal income minus:

personal tax payments

When the unemployment rate is lower than the natural rate, the output gap is __________.

positive

The __________ GDP is the level of real GDP assuming all of the economy's factors of production were fully employed.

potential

The output gap is the difference between __________.

potential GDP and actual GDP

Because the focus of long-run economic growth is on the standard of living of the average person, we measure the standard of living in terms of:

real GDP per person

At any given time around one-third of the working-age population is not considered to be in the labor force. Most of these individuals are __________.

retired or full-time students

Which of the following is included in the economist's definition of investment?

The purchase of new machines, factories, or houses

The U.S. real GDP per person in 2016 was __________.

$56,200

The working-age population is defined as the total number of people over the age of __________ who are not in jail, a hospital, the military or institutional care.

16

During the Great Depression the U.S. unemployment rate spiked as high as __________.

25 percent

A person is considered to be a full-time worker if they work __________ hours a week or more.

35

Which of these persons is officially unemployed?

A non-working individual who has looked for a job in the past week

How is GDP measured?

By adding the market value of all the final goods and services produced domestically in a given time period.

Which is the largest component of GDP?

Consumption

Which of these factors can change the natural unemployment rate?

Demographic changes

When the economy is at full employment, which types of unemployment remain?

Frictional and structural

In the circular flow model, who supplies factors of production in exchange for income?

Households

The United Nations compiles the __________ which combines a country's real GDP, data on life expectancy and health, and education data to provide a better measure of standard of living.

Human Development Index

Which of these is not a shortcoming of GDP as a measure of welfare?

It only counts final goods and services and not intermediate goods.

Which of these is an example of underground production?

Making illegal drugs.

Which of these scenarios would most likely be considered a structural change that impacted employment?

The invention and widespread use of the Internet.

The short-term unemployment that arises from workers in the process of changing jobs is called __________.

frictional unemployment

Marginally attached workers are individuals that do not have a job, are available and willing to work, __________.

have not looked for one in the previous four weeks but has looked for work sometime in the recent past

The unemployment rate in the Eurozone is usually __________ than the unemployment rate in the United States, partly because the Eurozone has __________ unemployment benefits and __________ regulated labor markets.

higher, higher, more

The flow of funds from __________ into the financial system makes it possible for government and firms to borrow.

households

Which of the following are not counted as final goods and used in the GDP calculation?

intermediate goods

When the economy is at the natural rate unemployment, the economy __________.

is at full employment

The total national income actually received by a country's residents is:

smaller than the value of GDP

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and job requirements is called __________.

structural unemployment

If Americans still worked sixty hour weeks, as they did in 1890, __________.

the GDP would be higher than it is but the well-being of the typical person would not necessarily be higher

The natural unemployment rate is the __________.

unemployment rate that results when the economy produces the potential level of real GDP

Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?

Real GDP

The unemployment rate is defined as the percentage of people in the __________.

labor force who are unemployed

When a significant fraction of the domestic production takes place in foreign-owned facilities, then the country's GDP will be __________ its GNP.

larger than

Which of these statements is true?

Pollution might lower a person's standard of living.

Real GDP is:

the value of goods and services evaluated at base year prices