question
What is capital?
answer
money or wealth used to invest in business or enterprise
question
What is human capital?
answer
the skills and knowledge gained by a worker through education and experience
question
What are natural resources?
answer
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain
question
What is GDP?
answer
Gross Domestics Product (GDP)
The market value of all final goods and services produced with a country in a given period (normally a year)
The market value of all final goods and services produced with a country in a given period (normally a year)
question
What are the two types of GDP?
answer
-Nominal
- Real
- Real
question
What is nominal GDP?
answer
The dollar value of all final goods and services produced within a country in one given year
- Unadjusted for inflation
- Unadjusted for inflation
question
What is real GDP?
answer
The dollar value of all final goods and services produced within a country in a one given year
- Adjusted for inflation
- expressed in constant dollar value
- Adjusted for inflation
- expressed in constant dollar value
question
What is the most accurate way to gauge growth?
answer
Real GDP
question
What is the deflator formula?
answer
Nominal GDP t / Real GDP t X 100
question
What can inflation do to an economy?
answer
Can give false conclusions about the economy
question
What is the inflation formula?
answer
CPI t - CPI t-1 / CPI t-1 X 100
question
What best measures the standard of living?
answer
GDP per capita
question
What is the real GDP per capita formula?
answer
Real GDP / Population
question
What is the symbol for GDP?
answer
Y
question
What is the formula for GDP?
answer
Y = C + I + G + NX
GDP = Consumption + Investments + Government + Net Exports
GDP = Consumption + Investments + Government + Net Exports
question
What is real GDP affected by?
answer
- Availability/Quality of goods
- Availability of capital
- Economic systems
- Availability of capital
- Economic systems
question
What is CPI?
answer
Consumer Price Index (CPI)
Measure of the overall level of prices
Measure of the overall level of prices
question
What is CPI (need a basket)
answer
Cost of basket in year t divided by cost of basket in base year X 100
- CPI t = CPI t / CPI B X 100
- CPI t = CPI t / CPI B X 100
question
What is the largest item in the basket/CPI
answer
housing
question
How do you calculate the CPI?
answer
1. Fix the basket
2. Find the prices
3. Compute the basket's cost
4. Choose a base year and compute the CPI
5. Compute the inflation rate
2. Find the prices
3. Compute the basket's cost
4. Choose a base year and compute the CPI
5. Compute the inflation rate
question
What does real interest rate equal?
answer
nominal interest rate - inflation rate
question
What is unemployment?
answer
Workers that are actively looking for a job but aren't working
question
What is unemployment rate?
answer
# unemployed / labor force x 100
question
What does the labor force equal?
answer
Employed + Unemployed
question
What is the population equal to?
answer
Labor Force - Not in Labor Force
question
What is the labor force participation rate formula?
answer
Labor Force / Population
question
How do we compare amounts of money in different periods of time?
answer
Amount in Today's $ = Amount in year T's
CPI Today/CPI year T
CPI Today/CPI year T
question
What is a country's standard of living?
answer
Real GDP/Person
question
What is productivity?
answer
Output per person per hour
question
What are the 3 types of unemployment?
answer
- Frictional unemployment
- Structural Unemployment
- Cyclical Unemployment
- Structural Unemployment
- Cyclical Unemployment
question
What is frictional unemployment?
answer
Temporarily out of work but do have skills that can transfer over to another job but is currently not working
question
What is structural unemployment?
answer
Out of work or lost their job because their skills become obsolete/useless and need to acquire new skills because their old skills are not transferable
question
What is cyclical unemployment?
answer
Workers who are out of work or lost their job because of a downturn in the business cycle (Ex. Great Depression)
question
What is the Natural Rate of unemployment?
answer
the 4%-6% of the economy that is always unemployed
question
What percent does the the Natural Rate of unemployment sit at?
answer
4%-6%
question
What are disgruntled workers?
answer
people who get frustrated and stop looking for work
question
What is under-employment?
answer
When a worker takes a job that they are overqualified for and are wasting human value
question
What is Investment spending?
answer
Spending on capital/increases capital stock
question
What is net exports (NX)?
answer
Exports - Imports
question
Which of the following items would be included in the calculation of current GDP? The purchase of:
answer
Season tickets to the Springfield symphony.
question
Suppose that over time, the country of Siena switched from being an agriculturally-based economy to a technologically-based economy. As a result, many people lost their jobs because they lacked the skills to use the new technology. These people would be considered a part of the?
answer
structurally unemployed
question
Michael decided to quit his job at the University of Alabama Tide Lab because he did not find the work challenging enough. Michael is currently looking for a better job. Therefore, Michel would be labeled as a?
answer
frictionally unemployed
question
GDP does not reflect?
answer
- the value of leisure.
- the value of goods and services produced at home.
- the quality of the environment.
- the value of goods and services produced at home.
- the quality of the environment.
question
When the wage is above the equilibrium level, ...?
answer
the quantity of labor supplied exceeds the quantity of labor demanded.
question
The CPI differs from the GDP deflator in that?
answer
It increases in the prices of foreign produced goods that are sold to U.S. consumers show up in the CPI but not in the GDP deflator.
question
By far the largest category of goods and services represented in the CPI basket is?
answer
Housing
question
The GDP deflator is?
answer
(Nominal GDP x 100)/(Real GDP)
question
Negative net exports means that
answer
the country buys more goods from other countries than it sells to other countries
question
Which of the following is not an example of physical capital?
answer
the knowledge of workers
question
The deviation of unemployment from its natural rate is called?
answer
Cyclical unemployment
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