Unit 2 Study Guide

Question 1

Expenditure Approach

Answer 1

C + I + G + (X - M) Consumer spending + Investment Spending + Net Exports

Question 2

Real Wage

Answer 2

Nominal wage / (CPI over 100)

Question 3

Real GDP

Answer 3

(Nominal GDP/GDP Deflator) x 100

Question 4

Labor force

Answer 4

Employed + unemployed

Question 5

Labor force participation rate (LFPR)

Answer 5

(Civilian Labor force / civilian non-institutional population) x 100

Question 6

Unemployment Rate (UR)

Answer 6

(Unemployed / Civilian labor force) x 100

Question 7

Rate of change

Answer 7

(New - old) over old x 100

Question 8

Discouraged worker

Answer 8

Someone who wants to be working but has given up looking for a job due to the state of the job market

Question 9

Frictional unemployment

Answer 9

Unemployment due to moving from one job to the next

Question 10

Structural unemployment

Answer 10

Workers lack the skills for jobs (technological advances)

Question 11

Cyclical unemployment

Answer 11

Unemployment resulting from cycles of economic upturn and downturn