Economic Indicators

GDP= Consumer Spending + Investment +?+ Net Exports

Which economic term completes the equations?

• Net Imports

• Consumer Saving

• Corporate Spending

• Government Spending

Which individual or group would benefit the MOST from unanticipated inflation?

• a family with a fixed income

• a laborer that is paid hourly

• a borrower with a fixed-rate loan

• a financial institution that lends money

Which of the following expenditures would not be included in GDP?

• Purchase of a new lawnmower.
• Purchase of a silver cup previously sold new in 1950.
• Purchase of a ticket to the latest movie.
• All of these would be counted in GDP.

In the circular flow model,

• money flows from the firms to the households through the product market.
• money flows from the households to the firms through the product market.
• money flows from the households to the firms through the resource market.
• money flows from the households to the firms through both the product market and the resource market.

All final goods and services that make up GDP can be expressed in the form:

• GDP = C + I - G + (X + M).
• GDP = C + I + G + (X + M).
• GDP = C + I + G + (X - M).
• GDP = C + I + (X - M).

The period between the peak and the trough is the _____; the period between the trough and the peak is the _____.

• recession; expansion
• expansion; recession
• peak; trough
• trough; peak

Inflation is defined as an increase in:

• real wages of workers.
• real GDP.
• the average price level.
• all consumer products.

A worker who was laid off due to a downturn in the business cycle would be considered

• frictionally unemployed.
• structurally unemployed.
• cyclically unemployed.
• seasonally unemployed.

Logan loses his job cooking pizza when a robot can do it faster and at a lower expense.  Which type of unemployment is he experiencing?

• Cyclical
• Structural
• Frictional
• Seasonal

The Consumer Price Index (CPI)

• consists of items a typical 18-year old might buy for himself or herself.
• uses a representative market basket to calculate current price levels in an economy.
• is equal to 200 in whichever year is considered the base year.
• only increases during times of economic expansion.