PBMF - Chapter 2 (Economic Activity)

The total dollar value of all final goods and services produced each year in a country.

• Gross Domestic Product (GDP)

• Unemployment Rate

• Consumer Price Index (CPI)

• Retail Sales

Monthly measure of the sales of durable and nondurable goods bought by consumers.

• Gross Domestic Product (GDP)

• Unemployment Rate

• Consumer Price Index (CPI)

• Retail Sales

The most widely used measure of national output.

• Gross Domestic Product (GDP)

• Unemployment Rate

• Consumer Price Index (CPI)

• Retail Sales

The percentage of people in the labor force who are willing to work, are looking for work, but are unable to find work.

• Gross Domestic Product (GDP)

• Unemployment Rate

• Consumer Price Index (CPI)

• Retail Sales

An increase in GDP per capita means that

• an economy is growing

• an economy is in a recession

• unemployment is too high

• individuals are not saving enough

In the United States, the labor force consist of all people above what age?

• 21

• 18

• 16

• 14

Inflation

• is least harmful to people on fixed incomes

• causes the buying power of the dollar to increase

• generally occurs at the same rate from year to year

• can sometimes stimulate economic activity if it is kept relatively low

A period of economic recovery

• is considered the high point of the business cycle

• is characterized by a rise in GDP

• usually causes businesses to lower production

• is marked by widespread unemployment

Only final goods are counted when GDP is measured.

• True

• False

People with poor credit ratings pay a higher rate to borrow money than people with good credit ratings.

• True

• False