Measuring Economic Performance
unemployed rate
((number of unemployed) / (labour force)) * 100
income inequality exists because:
- education levels vary - wealthy can afford college easier - discrimination - different abilities - access / location
cost-push inflation
-cost of producing goods rises causing AS to decrease (Stagflation- abnormal contraction)
Demand-Pull Inflation
-increase in AD causes price levels to rise -AD is greater than AS *too many dollars chasing too few goods (Expansion)
Full Unemployment Rate is reached when unemployment rate drops below...
5%
full employment is reached when the unemployment rate drops below...
5%
To see the actual distribution of income varies from equal distribution, an economist would use...
A Lorenz curve
Deflation
A decline in the general level of prices
Inflation
An increase in the general level of prices
A shoe manufacturer buys leather to buy shoes. The leather is considered what?
An intermediate good
rising unemployment and inflation are forms of what?
Economic instability
rising unemployment and inflation are forms of...
Economic instability
Frictional unemployment means that the workers skills do not match the jobs available in the economy. Workers must retrain and learn new skills. True or False?
False
In the event of inflation, a retired school teacher with a fixed pension would would not be hurt. True or False
False
The consumer price index (CPI) measures changes in price of consumer goods before they reach the retail level True or False?
False
The consumer price index (CPI) is a measure of what?
General price levels
full employment
Highly productive and efficient (under 6%)
Which of the following would not be included in real GDP? - paper/ financial transactions - government spending - consumer spending - investments made by a business
Paper / financial transactions
Economic growth
Producing more goods & services (RGDP about 3%)
Which of the following is a good example of an intermediate good? - purchase a new car - purchase a new lawnmower - purchase a new radio - purchase of leather to make shoes
Purchase of leather to make shoes
The single best measurement of the overall performance of the American economy and our standard of living is...
Real GDP
price stability
Requires slow rate of inflation (under 3%)
A construction worker cannot work during the winter because of the winter storm. He is...
Seasonally unemployed
The Lorenz curve
Shows how much ACTUAL distribution of income varies from EQUAL distribution
A receptionist loses his job when a computerized voice system is installed. He is...
Structurally unemployment
Cyclical unemployment occurs when jobs gained and lost in connection with the business cycle (during recession/ contraction jobs are lost, during expansion jobs are regained.) True or False?
True
In the event of inflation, a couple that buys a house with a 15 year fixed loan rate would be helped. True or False?
True
In the event of inflation, an employee in the technology industry that signs a contract with an annual COLAs would be helped. True or False?
True
Normal GDP is the current dollar value of the nations output with no adjustment for inflation. True or False?
True
Stagflation is the combination of inflation and unemployment, and leads to cost-push inflation. True or False?
True
Higher prices cost workers to get raises, causes producers to raise prices, is the...
Wage-price Spiral
The burden on high inflation falls most heavily on...
Workers on fixed income
A family who buys a home with a fixed rate mortgage
Would NOT hurt them
cyclical unemployment
loss of jobs by individuals during a recession and the corresponding slowdown in production
structural unemployment
unemployment that occurs when workers' skills do not match the jobs that are available
macroeconomic equilibrium is achieved when..
Aggregate demand intersects aggregate supply
Too many dollars chasing too few goods
Demand-pull inflation
CPI stands for
Consumer price index
An immediate effect of inflation is...
Decline in the purchasing power of the dollar
The immediate effect of inflation is the...
Decline of the purchasing power of the dollar
seasonal unemployment
state of being out of work because of the time of year
frictional unemployment
temporary unemployment of people changing jobs