Macro Measures

Question 1

Unemployment Rate Equation

Answer 1

(#looking)/(#looking+#working)

Question 2

Labor Force Participation Rate

Answer 2

(#looking+#working)/(all adults)

Question 3

3 Types of Unemployment

Answer 3

Frictional, Structural, Cyclical

Question 4

Which type of unemployment: Shifts in technology cause the layoff of many employees

Answer 4

Structural

Question 5

Which type of unemployment: Quitting to search for a ‘newer’ job with more benefits

Answer 5

Frictional

Question 6

Which type of unemployment: The demand for tobacco falls, so many workers are laid off

Answer 6

Cyclical

Question 7

Which type of unemployment is known as “demand deficient unemployment?”

Answer 7

Cyclical

Question 8

Which type of unemployment is known to have “creative destruction,” what does it mean?

Answer 8

Structural; the erasing of jobs as technology changes

Question 9

What are the critiques of the unemployment rate?

Answer 9

• It does not consider the ‘discouraged workers’
• It does not reflect demographic differences
• It does not reflect those underemployed

Question 10

Inflation

Answer 10

The rise in the general level of pricing, reducing the spending power of real dollars

Question 11

Disinflation

Answer 11

Slower inflation rate

Question 12

Deflation

Answer 12

The decrease in the general level of pricing

Question 13

Name the three problems with CPI

Answer 13

Substitution bias, Product Quality, New Products

Question 14

Name the three causes of inflation

Answer 14

Too much government spending, demand-pull inflation, cost-pull inflation

Question 15

Cost-Pull Inflation

Answer 15

Increase in cost of production -> increase in price

Question 16

Demand-Pull Inflation

Answer 16

Shortage in supply from increased demand -> increase in price

Question 17

What is GDP

Answer 17

Gross Domestic Product(GDP) is the value of all FINAL goods and services produced within a country

Question 18

What is GDP per Capita

Answer 18

Measures how many products each person makes
- best measure for standard of living

Question 19

What factors are not included in GDP?

Answer 19

• intermediate goods(resources used to produce final product)
• nonproduction transactions(financial transactions/purchasing used goods)
• nonmarket/illegal activity

Question 20

What are the 4 factors included in GDP?

Answer 20

Consumer, Investment, Government Spending, Net Export