MacroEcon Unit 4 Test Review

A business fires 75% of their employees in '08 b/c of recession. Employees are ___ unemployed.

Cyclically (cyclical)

You graduated from COLLEGE and are currently looking for your 1st job. You are ___ unemployed.

Frictionally (frictional)

Retail profits fell leading to the termination of a part-time cashier. Cashier is _ unemployed.

Cyclically (cyclical)

Toll-booth cashier becomes unemployed when a machine does his job better. He is ___ unemployed.

Structurally (structural)

Index of avg level of prices for approx. 90,000 goods and services in the economy is the ___

consumer price index

Inflation that occurs because the price of essential raw materials or wages has increased is called

cost-push inflation

An effect of inflation

people on fixed incomes have decreased purchasing power

During periods of unexpected inflation, people who previously borrowed:

gain because they repay loans with cheaper dollars.

Choose the correct letter on the graph that represents a recession.

X

Which phase of the business cycle would the economy experience its lowest rate of unemployment?

peak

In which sector of the economy would a teacher here at FCHS be employed by?

Public

The market value of all final goods & services produced in a country in a given period of time.

Gross Domestic Product

C + I + G + (X-M) - which letter represents the largest sector of the macroeconomy

C

Which component of GDP can be a negative number?

net exports

Which of the following would be counted in this year's GDP?

the sale of a new house

GDP expressed in constant—or unadjusted for inflation—prices could also be referred to as

Nominal GDP

Economists like to convert statistical series to real terms (i.e. real GDP) b/c the adjustment

removes the distortions caused by inflation.

A person who cleans their own house takes part in

nonmarket transaction

When Coca-Cola buys a shipment their secret ingredient it is considered to be

an intermediate product.

When calculating GDP, the purchase of a new business office is counted as

investment

If intermediate goods and services were included in GDP:

GDP would be overstated

To be counted in the civilian labor force, a person must be

employed or looking for work, and age 16 and over.

There are always workers who are in the process of changing jobs, so there is always some ____

frictional unemployment

What's the effect of an increase in automobile worker wages on the market for automobiles?

supply decrease, demand increases