Economic Performance

Question 1

Business cycle?

Answer 1

A series of growing and shrinking periods of economic activity

Question 2

Consumer price index (CPI)?

Answer 2

Measure of changes in the prices of goods and services commonly purchased by consumers

Question 3

Consumption (calcul. GDP)

Answer 3

All spending by households on durable goods, nondurable goods, and services.

Question 4

Contraction?

Answer 4

Producers cut back, resources become less scarce, and prices tend to stabilize.

Question 5

Cyclical unemployment?

Answer 5

Factor of overall unemployment that relates to cyclical trends in growth and production in the business cycle

Question 6

Depression?

Answer 6

Extended period of high unemployment and reduced business activity.

Question 7

Durable good?

Answer 7

Good lasting longer than three years

Question 8

Economic growth?

Answer 8

Percentage changes in real GDP

Question 9

Frictional unemployment?

Answer 9

Temporary unemployment experienced by people changing jobs

Question 10

GDP (gross (total) domestic product)?

Answer 10

Market value of all final goods and services produced within a nation in a given time period

Question 11

Government spending (calcul. GDP)?

Answer 11

All of the expenditures of federal, state, and local government on goods and services

Question 12

Hyperinflation?

Answer 12

Rapid uncontrollable rate of inflation in excess of 50% per month that makes money virtually useless

Question 13

Inflation?

Answer 13

Sustained rise in the level of prices and a sustained fall in the purchasing power of money

Question 14

Investment (calcul. GDP)?

Answer 14

What businesses spend, both fixed expenses and inventory

Question 15

Net exports (calcul. GDP)?

Answer 15

All goods and services produced in the nation but sold in foreign countries minus the value of imports

Question 16

Non-durable goods?

Answer 16

Good lasting less than three years

Question 17

Peak?

Answer 17

Highest point of GDP

Question 18

Productivity?

Answer 18

Amount of output produced from a set amount of inputs

Question 19

Real GDP?

Answer 19

GDP that is corrected for changes in prices from year to year

Question 20

Real GDP per capita?

Answer 20

Real GDP/total population

Question 21

Recession?

Answer 21

Economic contraction lasting less than two quarters

Question 22

Seasonal unemployment?

Answer 22

Unemployment linked to the changing of the seasons

Question 23

Structural unemployment?

Answer 23

Situation in which jobs exist, but workers looking for work do not have the necessary skills for work or do not have the necessary skills for their jobs

Question 24

Trough?

Answer 24

Final point of a business cycle

Question 25

Underemployment?

Answer 25

Percentage of population who wishes to have a higher level of work or pay

Question 26

Unemployment?

Answer 26

Percentage of population 16+ who don’t work

Question 27

Unemployment rate?

Answer 27

Percentage of the labor force that is jobless and looking for work

Question 28

What are the four components of GDP?

Answer 28

Consumption, investments, government spending, and net exports.

Question 29

How do you calculate GDP?

Answer 29

C+I+G+X=GDP

Question 30

What are the affects of inflation (3)?

Answer 30

Decrease in value of $, increase in interest rates, and decrease of real returns on savings

Question 31

How is the labor force for each nation calculated?

Answer 31

The population of ages 16+ employed or looking/available for work.

Question 32

How do you calculate unemployment rate?

Answer 32

Unemployed/labor force•100

Question 33

What is the difference between a recession and a depression?

Answer 33

A recession is less that two quarters (six months) and a depression is more than two quarters.

Question 34

What is the lowest point of the business cycle?

Answer 34

Trough

Question 35

What is the highest point of the business cycle?

Answer 35

Peak