7.1 and 7.4 Study Guide

What is the formula for GDP?

• Y = C+I+G+(X-M)

• Y = C+I+G(X-M)

• Y = G+I+G+(X-M)

• Y = C+I+G+(X+M)

What is the GDP for Country W?

Consumption: $10,000 Exports: $1,500 Imports: $1,000 Government: $2,500

Investment $3,000

• $16,000

• $15,000

• $18,000

• $13,500

What does X represent in the GDP formula?

• Exports

• Imports

• Net exports

• Government

What does M represent in the GDP formula?

• Exports

• Imports

• Net exports

• Government

What is it called when there is a permanent loss of jobs because of nontransferable skills?

• Creative destruction

• Technological unemployment

• Unemployed

• Seasonal unemployment

Which type of unemployment has to do with temporary unemployment or being between jobs?

• Frictional

• Structural

• Technological

• Cyclical

What is the primary cause of structural unemployment?

• Inadequate demand for goods and services

• Technological changes and automation

• Seasonal variations in employment

• Insufficient education and skills of the workforce

What is the primary cause of cyclical unemployment?

• Technological changes and automation

• Seasonal variations in employment

• Economic downturns or recessions

• Insufficient education and skills of the workforce

Which of the following is NOT counted in GDP?

• Purchasing groceries

• Intermediate goods

• Building a new factory

• Funding public education

Amy is a full-time student who focuses on her studies and not seeking work. Is this example counted in the labor force?

• True

• False