Ch 9 Flashcards
The unemployment rate of
Teenagers is much higher than that of the adults
Most economists agree that the immediate determinant of the volume of output and employment is the
Level of total spending
Cyclical unemployment results from
A deficiency of spending on goods and services
Structural unemployment
May involve a locational mismatch between unemployed workers and job openings
Wait unemployment and search Unemployment are both types of what kind of unemployment
Frictional unemployment
The relationship between the size of the negative GDP gap and unemployment rate is
A direct relationship
If the consumer price index calls from 120 to 116 in a particular year, economy has experienced
A deflation of 3.33%
Demand pull inflation occurs when
Occurs when total spending in the economy is excessive
Inflation initiated by increases in wages or other resource prices is labeled
Cost push inflation
Cost push inflation moves the production possibilities curve how
Moves economy inward from its production possibilities curve
Inflation affects
Both The level and the distribution of income
Supposed nominal annual interest rate on a two year loan is 8% lenders expect inflation to the 5% in each of the two years. The annual real rate of interest is
3%
The feudal practice of clipping coins illustrates the idea
Taxation through inflation
Declines in stock prices measured by the Dow Jones average
Sometimes precedes recession, sometimes do not
True or false. People who work part time, but desire to work full time, Are considered to be officially unemployed
False
The industries or sectors of the economy in which business cycle fluctuations tend to affect output most are
Capital goods and durable consumer goods
True or false. There are a wide range of theories as to the underlying causes of business cycle movements
True
Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management presently what type of unemployment
Frictionally unemployed
True or false. The unemployment rates of men and women workers are roughly the same
True
The type of unemployment associated with recession is called
Cyclical unemployment
A large negative GDP gap implies
A high rate of unemployment
If actual GDP is 500 billion and there is a negative GDP gap of 10 billion potential GDP is
510 billion
It’s potential GDP is 330 billion and there is a positive GDP 30 billion real GDP is
360 billion
Demand pull inflation occurs when
Occurs only when the economy has reached it’s absolute production capacity
Real income can be determined by
Deflating nominal income for inflation
True or false. The price level double and a 23 year period, we can conclude that the average annual rate of inflation over that. Period Was about 3%
True
