Economic Measurements

Question 1

GDP definition

Answer 1

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

Question 2

Real GDP

Answer 2

adjusted for inflation

Question 3

Nominal GDP

Answer 3

Measured in current price

Question 4

Components of GDP

Answer 4

Consumer spending
Investment spending
Government spending
Net exports

Question 5

Two ways to calculate GDP

Answer 5

Income

Expenditure

Question 6

Income approach

Answer 6

Wage + rent + interest + profits

Question 7

Expenditure approach

Answer 7

C + I + G + Nx

Question 8

GDP doesn’t measure

Answer 8

Intermediate good
Non market transaction
Secondhand sales
Transfer payment
Financial transaction

Question 9

Aggregate supply

Answer 9

Supply curve for entire economy

Question 10

Three phases of GDP

Answer 10

Keynesian
Intermediate
Classical

Question 11

Keynesian

Answer 11

In recession

Question 12

Intermediate stage

Answer 12

Growing economy

Question 13

Classical stage

Answer 13

Near peak of business cycle

Question 14

Phases of business cycle

Answer 14

Peak
Contraction
Trough
Expansion

Question 15

Peak of business cycle

Answer 15

GDP high
unemployment low
Inflation high

Question 16

Contraction business cycle

Answer 16

GDP decreasing

Unemployment rising

Question 17

Trough business cycle

Answer 17

Unemployment highest

Question 18

Expansion business cycle

Answer 18

GDP rising

Unemployment lowering

Question 19

Inflation

Answer 19

Too much money chasing too few goods

Question 20

Deflation

Answer 20

Fall in price level

Question 21

Ceteris Paribus

Answer 21

Holding other things constant

Question 22

CPI

Answer 22

Measure of change in average price of consumer goods and services

Question 23

What is CPI used for

Answer 23

Measures inflation

Question 24

How to calculate CPI

Answer 24

CPI this year - CPI last year / CPI last year

Question 25

COLA

Answer 25

Cost of living adjustment

Question 26

MV = PQ

Answer 26

Money x velocity = price x quantity

Question 27

Work force

Answer 27

All employed people

Question 28

Civilian labor force

Answer 28

Able to work and actively working or seeking employment

Question 29

What does civilian work force exclude

Answer 29

Military
Retired
Younger than 16
Institutionalize

Question 30

Employed people

Answer 30

Over 16 who works for a minimum of 1 hour a week
Work for a family business for 15 hours per week
Temporarily absent

Question 31

How to calculate unemployment rate

Answer 31

Number unemployed / civilian labor force

Question 32

How to calculate total labor force

Answer 32

Employed + unemployed

Question 33

How to calculate labor force participation rate

Answer 33

Civilian labor force / older than 16

Question 34

How to calculate employment

Answer 34

Employed / civilian labor force

Question 35

Types of unemployment

Answer 35

Frictional
Seasonal
Structural
Cyclical

Question 36

Frictional unemployment

Answer 36

Voluntarily moving jobs

Question 37

Seasonal unemployment

Answer 37

Hired for a specific season

Question 38

Structural unemployment

Answer 38

Change in structure of job

Question 39

Cyclical unemployment

Answer 39

Downturn in business cycle

Question 40

Full unemployment

Answer 40

Not possible due to frictional and structural unemployment

Between 3-5%

Question 41

Natural unemployment

Answer 41

Frictional and structural

Question 42

Discouraged worker

Answer 42

stop looking for job

Not unemployed

Question 43

Philips curve

Answer 43

Inverse relationships between unemployment rate and inflation rate

Question 44

How does a philips curve work

Answer 44

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