Unit 3 Review

GDP stands for Gross Domestic Policy

• True
• False

In a typical business cycle model, which stage immediately follows a trough?

• Expansion
• Contraction
• Peak

What is happening to the economy in a period of economic contraction?

• GDP is rising and unemployment is falling.
• GDP is rising and unemployment is rising.
• GDP is falling and unemployment is rising.
• GDP is falling and unemployment is falling.

Caleb takes a job selling cars.  In six months he is laid off due to a slowing economy and poor car sales.  What type of unemployment is Caleb experiencing?

• frictional
• structural
• seasonal
• cyclical

If you live on a fixed income, how will you be affected by inflation.

• You are hurt because your purchasing power has decreased.
• You are helped because your purchasing power has increased.
• You are helped because interest rates rise.
• You are hurt because interest rates rise.

What is the formula for calculating GDP if using the expenditure approach?

• consumption + investment + government spending + net exports
• wages + interest + rent + profit
• add up all values added to the good
• none of these

Which of the following would NOT be considered part of the labor force?

• Tyler, a banker who feels he is overqualified for his job.
• Savana, who is unemployed but has attended  three job interview in the last month.
• Ricky, who has a part-time job but wants a full-time job.
• Garrett, a stay-at-home dad.

Inflation is measured by the:

• GDP
• Unemployment rate
• CPI
• GNP

This is when a person becomes unemployed because they do not have the skills they need to find a job:

• frictional
• seasonal
• structural
• cyclical

GDP is the total value of goods and services

• produced all over the world
• produced in one month
• produced within a nation's borders
• produced by a singl company