AP Macro 2.1-2.3 Review

Front

What is the circular flow model primarily used to illustrate?

Back

The flow of money between households and firms

Front

Which of the following is NOT a component of GDP? Consumption Spending, Investment Spending, Financial Asset Spending, Government Spending Spending

Back

Financial Asset Spending

Front

Identify the type of unemployment that occurs when workers' skills do not match the jobs available.

Back

Structural Unemployment

Front

Back

$950

Front

Which of the following best describes cyclical unemployment? Options: Unemployment due to seasonal work, Unemployment due to economic downturns, Unemployment due to technological changes, Unemployment due to voluntary job changes

Back

Unemployment due to economic downturns

Front

Explain how the circular flow model demonstrates the relationship between households and firms.

Back

Households provide labor and receive wages, while firms produce goods and services.

Front

Which method of GDP calculation involves summing up all incomes earned in the economy?

Back

Income Approach

Front

Discuss the impact of high unemployment on an economy.

Back

It can cause a decrease in overall economic output.

Front

What is the formula for calculating GDP using the income approach?

Back

GDP = Wages + Rent + Interest + Profits

Front

How do you calculate the natural rate of unemployment?

Back

Frictional + Structural