CHAPTER 14 ECON TEST
To an economist, full employment is reached when the unemployment rate drops below
4.5 percent
Deflation
A decrease in the general price level
A severe recession with high unemployment, acute shortages, and excess manufacturing capacity is known as
A depression
To calculate the inflation rate, economists
Divide the change in the price level by the beginning price level and multiply by 100
Which best describes the movement of the center of population of the United States
East to west
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
All of the following are consequences of inflation EXCEPT
Interest rates decrease
Which of the following factors did NOT contribute to the Great Depression?
Massive govt. spending for wartime goods.
Business Fluctuations
Nonsystematic upturns and downturns of real GDP
Fertility Rate
Number of births that 1,000 women are expected to undergo in their lifetime
Unemployment Rate
Number of employed 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 works and their skills
Technological unemployment
Occurs when workers with less skills, talk, 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
Center of Population
Point where the country would balance if it could be laid flat and if everyone weighed the same
Dependency Ration
Ratio based on the number of children and elderly for every 100 persons in the working age bracket of 18 through 64
When a construction worker cannot work because of a winter snowstorm, he is
Seasonally unemployed.
The unemployment rate understates employment conditions for all of the following reasons EXCEPT
Some workers are "between jobs" for one reason or another.
Since colonial times, the rate of growth of the United States population has
Steadily decreased
Business Cycles
Systematic upturns and downturns of real GDP
A telephone receptionist loses his job when a computerized voice mail system is installed at his office. He is
Technology unemployed.
The official count of all people in the United States is called
The decennial census
Net Immigration
The net change in population caused by people moving into and out of the country
Price Level
The relative magnitude of prices at one point in time
Cyclical Unemployment
Unemployment directly related to swings, in the business cycle
Frictional Unemployment
Unemployment: caused by workers who are "between jobs"
An economist who attributes inflation to no single group is holding to the
Wage-price spiral theory of inflation
The index of leading indicators
is used to predict changes in business cycles.
Population Pyramid
Bar graph that shows the breakdown of population by age and gender
All of the following factors contribute to business cycles, EXCEPT
Business fluctuations
All of the following factors affect population growth EXCEPT
Demographers
What are the two phases of the business cycle?
Depression and recession
All of the following are theories regarding the cause of inflation EXCEPT
Cost-pull
An assembly line worker in an automobile plant is laid off during a recession. She is
Cyclically unemployed
Since colonial times, the average size of a household in the United States has
Decreased
According to the excessive monetary growth theory of inflation, extra money in the economy is spent leading to a
Demand-pull effect