Unit 5 Review

Question 1

Which of the following is not used for national income accounting?

Answer 1

Labor

Question 2

The dollar value of all final G&S produced in a nation’s borders

Answer 2

GDP

Question 3

The following is used to compute GDP by adding up all the money spent by the people of a nation

Answer 3

Expenditure Approach

Question 4

The following is used to compute GDP by adding all the money earned by the people in a country.

Answer 4

Income Approach

Question 5

What is GDP called that is calculated in today’’s dollars?

Answer 5

Nominal GDP

Question 6

What is GDP called that is calculated in inflated dollars?

Answer 6

Real GDP

Question 7

The limitations of calculating GDP because people often do many things for themselves.

Answer 7

Nonmarket Activities

Question 8

The limitations of calculating GDP because people are engaged in illegal activity.

Answer 8

Underground Economy

Question 9

The limitations of calculating GDP because it is impossible to measure happiness.

Answer 9

Quality of Life

Question 10

The limitations of calculating GDP because of unintended side effects of economic activity.

Answer 10

Negative Externalities

Question 11

The phase of the business cycle that depicts economic growth

Answer 11

Expansion

Question 12

The phase of the business cycle where GDP reaches its lowest point before economic growth.

Answer 12

Trough

Question 13

The phase of the business cycle where GDP reaches the highest point before economic decline

Answer 13

Peak

Question 14

The phase of the business cycle that depicts a decline in GDP.

Answer 14

Contraction

Question 15

Buying new equipment can cause which of the following?

Answer 15

Creates more jobs, Produce more goods, Expand the business cycle

Question 16

What signal does low interest rates send to the people in the economy?

Answer 16

Buy more, Expand your businesses

Question 17

What signal does high interest rates send to the people in the economy?

Answer 17

Don’t borrow

Question 18

How can consumer expectations cause the economy to fail?

Answer 18

They will stop buying G&S

Question 19

September 11th is an example of an ____________ shock

Answer 19

External

Question 20

Which of the following is not a leading economic indicator?

Answer 20

Boarding Rates

Question 21

What is gained with capital deepening within an economy?

Answer 21

Hum capital is increased, Physical Capital is increased

Question 22

The type of unemployment where people are taking their time to find a new job.

Answer 22

Frictional Unemployment

Question 23

Unemployment that occurs when workers do not have the skills needed to be successful.

Answer 23

Structural Unemployment

Question 24

Types of unemployment when workers only work certain times of the year.

Answer 24

Seasonal Unemployment

Question 25

Type of unemployment that occurs due to a recession or downturn in the economy

Answer 25

Cyclical Unemployment

Question 26

Which of the following is considered full employment?

Answer 26

4-6%

Question 27

What do we consider a person with a masters degree working at a coffee shop?

Answer 27

Underemployed

Question 28

What do we consider workers that have given up looking for a job?

Answer 28

Discouraged worker

Question 29

Which of the following is a reason for the income gap in America?

Answer 29

Skills & Education, Inheritance, Field of Work

Question 30

What is one of the major causes of poverty in America?

Answer 30

Lack of Education, Divorce, Discrimination, Manufacturing to service jobs

Question 31

Which of the following are included in traditional antipoverty programs?

Answer 31

Food Stamps & Education

Question 32

Which of the following were included in the new antipoverty programs?

Answer 32

Job skills class

Question 33

The index that accounts for the cost of household goods.

Answer 33

Consumer Price Index (CPI)
(market basket)

Question 34

Inflation that occurs at a rate of 1–3%.

Answer 34

Creeping Inflation

Question 35

Inflation that occurs at a rate of over 100%

Answer 35

Hyper Inflation

Question 36

Inflation that occurs at a rate of 4-99%.

Answer 36

Galloping Inflation

Question 37

What is the theory economist use for one of the causes of inflation?

Answer 37

The Quantity Theory

Question 38

What causes cost-push inflation?

Answer 38

What causes cost-push inflation?

Question 39

What causes demand-pull inflation?

Answer 39

Consumers spending too much

Question 40

Which of the following are effects of inflation?

Answer 40

Purchasing power is reduced