Macroeconomics Exam #2

Flashcards for Exam #2 Macro Economics ECON 101 E

Which of the following is a Macro Economic Question?

How many people are employed in the economy as a whole this year?

What are periods of economic downturn when output and employment are falling called?

Recessions

What are periods of economic upturn when output and employment are rising called?

Expansions

In the United States, what organization determines when a recession begins and ends?

NBER

What is a rising overall level of prices called?

Inflation

What do economists and policymakers aim for because both inflation and deflation can cause problems?

Price Stability

What are goods and services sold to other countries called?

Exports

What is spending on productive physical capital, such as machinery and construction of buildings, and on changes to inventories called?

Investment Spending

______ is defined as the total value of all final goods and services produced in an economy during a given period, usually a year.

GDP

______ _____ ______ _______ are goods and services sold to the final, or end user called.

Final Goods and Services

GDP (Gross Domestic Product) =

C+I+G+X+NX

______ ________ is the total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year.

Real GDP

A ______ basket is a hypothetical set of consumer purchases of goods and services

Market basket

The _______ measures the cost of the market basket of a typical urban United States family.

CPI

________ is the number of people currently employed in the economy, either Full Time or Part Time.

Employment

The ______ _______ is equal to the sum of employment and unemployment?

Labor Force

________ unemployment is unemployment due to the time workers spend in job search.

Frictional

The ______ rate of unemployment is the unemployment rate that arises from the effects of frictional plus structural unemployment.

Natural

Natural Unemployment =____________unemployment + __________unemployment

Frictional +Structural Unemployment

The _______ interest rate is the nominal interest rate minus the rate of inflation.

Real

The _______ interest rate is expressed in dollar terms.

Nominal

_______ Exports are the difference between the value of exports and the value of imports.

Net Exports

An _______ economy is an economy that trades goods and services with other Countries.

Open

In the United States, citizens under the age of _______ are not included in the employment figures.

16

Economics is based on the question of the allocation of _______ resources.

Scarce resources.

If the nominal interest rate is 5 percent and the rate of inflation is 2 percent, then what is the real interest rate?

3 percent

What is a mutual fund?

An institution that sells shares to the public and uses the proceeds to buy a selection of various types of stocks, bonds, or both stocks and bonds

The source of the supply of loanable funds for Investment is:

Savings

What agency calculates the CPI?

Bureau of Labor Statistics

International data on GDP and socioeconomic variables:

Leave no doubt that a nation's GDP is closely associated with its citizens' standard of living

In the CPI of the United States, what is the largest percentage for one category of the CPI?

Housing

Productivity is the amount of goods and services:

Produced for each hour of a worker's time. It is linked to the economic and fiscal policies of that nation.

Your author suggests that the CPI is not perfect, what does it tend to do?

Overstate inflation