Chapter 12-13 Test

Question 0

how the data is compiled and presented

Answer 0

NIPA (National Income Product Analysis)

Question 1

A system that collects macroeconomic statistics on production, income, investment, and savings.

Answer 1

National income

Question 2

The dollar value of all final goods and services produced within a country’s borders in a given year

Answer 2

GDP (Gross Domestic Product)

Question 3

Goods that last for a relatively long time, such as refrigerators, cars, and DVD

Answer 3

Intermediate goods

Question 4

Calculates GDP by adding up all the incomes in the economy

Answer 4

Income approach

Question 5

Expansion and its stages?

Answer 5

Expansion equals economic growth. A 1st world country goes through an industrial and technological evolution, and an example would be America. A 2nd world country goes through a technological evolution. A 3rd world country has a food crisis, not usually a rogue state, and is starting to catch up. A 4th world country is starving and sometimes a rogue state. An example being Bangladesh.
A peak, the height if the economic expansion. The contraction is s period of economic decline marked by falling real GDP. Also during this period unemployment goes up. Trough is the lowest point in an economic contraction, when real GDP stops falling.
A recession lasts 6-18 months of economic decline, and has an unemployment rate of 6-10%. A depression is a recession that is especially long and severe.

Question 6

A decline in real GDP combined w/ a rise in the price level w/inflation going down

Answer 6

Stagflation

Question 7

The process of increasing the amount of capital per work

Answer 7

Capital Deepening

Question 8

What are the four types of unemployment?

Answer 8

1. Frictional Unemployment- unemployment that occurs when people take time to find a job
2. Seasonal Unemployment- unemployment that occurs as a result of harvest schedules or vacations, or when industries slow or shut down for a season
3. Structural Unemployment- unemployment that occurs when workers skills do not match the jobs that are available
4. Cyclical Unemployment- unemployment that rises during economic downturns and falls when the economy improves

Question 9

What are the causes of inflation rates?

Answer 9

• too much money
• demand theory- theory that inflation occurs when demand for goods and services exceeds existing supplies
• cost-push theory- theory that inflation occurs when producers raise prices in order to meet increased cost.
• wage-price spiral- when inflation goes up then unemployment goes down