2/7 lecture

Question 1

why does RGDP fall during recessions

Answer 1

decrease in labor

Question 2

why did labor recover so slow after great recession

Answer 2

because of capital evolution, Firms stopped investing

Question 3

extensive margin
individual:
aggregate:

Answer 3

(yes/no answer)
individual = employed vs not employed
aggregate = total employment

Question 4

intensive margin
individual:
aggregate:

Answer 4

(answer with if yes, then how much)
individual:daily/monthly/annual hours
aggregate: total hours worked by the employed

Question 5

what is working age

Answer 5

any person 15-64 years of age

Question 6

employed status is

Answer 6

workers presently matched with a suitable eployer

Question 7

unemployed is

Answer 7

workers searching for a suitable employer

Question 8

out of the labor force is

Answer 8

a working age person who has stopped searching for suitable employer

Question 9

impact of less people working

Answer 9

impacts elderly because less can be supported when they retire from social security

Question 10

how has US employment rate changed over time

Answer 10

increase but not as fast (not steep slope)

Question 11

how hasUS unemployment rate changed last 70 years

Answer 11

increased

Question 12

persistant
structural:
frictional:

Answer 12

‘natural rate of unemployment’
structural: due to a persistent mismatch between supply and demand
frictional: due to the time it takes to find suitable jobs

Question 13

non persistent cyclical unemployment is

Answer 13

related to various types of macroeconomics cycles

Question 14

why has frictional unemployment dropped

Answer 14

because of digitizing the job market and willingness to move for a job

Question 15

what is friction unemployemnt

Answer 15

it takes a lot of time to find good employee, openings are not filled immediately

Question 16

what are factors of production

Answer 16

technology, capital, labor

Question 17

capital is

Answer 17

goods that are used in the production of other goods + inventories

Question 18

example of capital

Answer 18

machines and computers

Question 19

what is the difference between capital and intermediate goods is that

Answer 19

capital is used in the production process whereas intermediate goods is used up in its entirery

Question 20

what is capital stock

Answer 20

all of the countries previously accumulated capital

Question 21

what is investment in econ

Answer 21

the production of new capital

Question 22

what is the basic idea of the perpetual inventory method

Answer 22

interpret economies capital stock as an inventory. the stock of inventory increases with capital formation (investments)

Question 23

what belongs in a production function is capital ___ _____, not capital ___ ______

Answer 23

in use; in place

Question 24

capital in use is

Answer 24

capital actively used in production

Question 25

capital in plac eis

Answer 25

capital stock

Question 26

what happens to capital in use during recession

Answer 26

it falls because capital like machines are not being used

Question 27

what does technology measure

Answer 27

how good an economy uses capital and labor to produce output

Question 28

how do we measure technology

Answer 28

measure it indirectly by way of theoretical production function instead

Question 29

what is the most well known production fucntion called

Answer 29

Cobb-douglas

Question 30

why is technology or TFP often called a residiual

Answer 30

because it is used to explain changes in output that cannot be accounted for by capital accumulation or increased labor input

Question 31

stock is

Answer 31

A variable that can be measured at a specific point in time and typically accumulates over time

Question 32

flow is

Answer 32

a variake that can only be measured over an interval of time

Question 33

what is income

Answer 33

net of taxation, output is distributed as income to either capital or labor

Question 34

labor income is

Answer 34

wages and salaries

Question 35

capital income is

Answer 35

interest rates and dividends