unit 5 economic performance

When Allison, a college math professor, leaves her job at a small rural college and starts looking for a job at a large urban university, she is

Frictionally unemployed.

Why do economists analyze leading economic indicators such as the Dow Jones Industrial Average?

To predict changes in future economic activity.

A knitting factory worker who losses her job because the company had relocated the plant to another country is an example of

Structural unemployment.

When the economy is working properly, what is the unemployment rate?

4 to 6 percent.

A period of recovery from a recession is know as

An expansion

The Federal Deposit Insurance Corporation (FDIC) was created to

Provide modest bank insurance for depositors.

According to the demand-pull theory, what is responsible for inflation?

Demand for goods and services exceeds existing supply.

What indicates what would happen to the economy if it were not interrupted by alternating periods of recession and recovery?

Trend line.

percentage of the nation's labor force that is not employed

Unemployment Rate

A general increase in prices

Inflation

Income that does not increase even when prices go up

Fixed income

A measurement that shows how the average price of a standard group of goods changes over time

Pride Index

Government issued coupons that are exchanged for food

Food stamps

An official count of the population

Census

Products that would be used in calculating GDP include

Cars manufactured in Tennessee at a factory owned by a Japanese automobile company

Which of the following people is most likely to be classified as "working poor"?

1. Carol, a single mother who works 35 hours a week at a job that pays slightly above minimum wage

2. Jim, who is a full-time student with a work study job in the college library

3. Dolores, who has an advanced degree and works 40 hours a week.

4. Jason, who is working part time as a construction worker so he can devote time to starting up a real estate business

1

Which of the following describes demand-pull inflation?

a. the last stage before monetary collapse

b. rising costs in energy which cause higher prices of products

c. a 1 to 3 percent rise in prices over the course of a year

d. the economy cannot produce quickly enough for all sectors, and shortages occur

D

A decline in real GDP lasting at least two quarters or more is called a

Recession

What does the consumer price index (CPI) measure

Changes in the prices consumers pay for a representative “basket” of goods and services

What does it mean when a person is underemployed?

The person had a job but they are overqualified for it.

What type of family is statistically the most likely to live below the poverty threshold

A black family headed by a single mother living in the inner city.

Inflation characterized by rising input costs, especially energy and organized labor, which drive up the cost of products for manufacturers is called

Cost-push inflation

Gross national product (GNP) differs from GDP by measuring

Total national income

Which person would not be included in the civilian labor force?

an army general who works in Washington, D.C.

What is the difference between seasonal unemployment and structural unemployment?

Seasonal unemployment occurs because of schedules, whereas structural occurs because people lack skills.