Exploring Circular Flow, GDP, and Unemployment Concepts

This AP Macro review video by Matt Romano covers key topics from Unit 2, focusing on macroeconomic indicators such as GDP and unemployment. It explains the circular flow model, methods for calculating GDP, and the limitations of GDP as an economic measure. The video also delves into the labor force, types of unemployment, and provides practice problems to reinforce learning.

What is the primary focus of GDP as an economic indicator?

• To measure the happiness and well-being of a country's population

• To measure the total economic output of a country

• To measure the total educational output of a country

• To measure the income equality within a country

What is considered when calculating GDP using the expenditures approach?

• Intermediate goods

• Financial asset transactions

• Used goods sales

• Government purchases of goods and services

Which of the following is NOT included in the calculation of GDP?

• Investment in new residential buildings

• Government expenditures on public services

• Transactions involving used goods

• Exports of domestically produced goods

Which method of calculating GDP involves adding up all income earned by factors of production?

• Expenditures approach

• Income approach

• Value-added approach

• Market price approach

What does the labor force participation rate measure?

• The percentage of the labor force that is unemployed

• The percentage of the adult population that is eligible and participating in the labor force

• The percentage of the total population that is employed

• The percentage of the labor force that is involved in the agricultural sector

What is NOT considered when calculating the unemployment rate?

• Retired individuals

• Individuals actively seeking jobs

• Part-time employed individuals

• Discouraged workers

Which group is included in the labor force?

• Children under the age of 16

• Individuals with part-time jobs

• Retired individuals

• Full-time students not seeking employment

What does the labor force participation rate represent?

• Percentage of retired individuals working or seeking work

• Percentage of people over 16 working or seeking work

• Percentage of total population working or seeking work

• Percentage of people under 16 working or seeking work

Which type of unemployment is associated with economic recessions?

• Natural unemployment

• Frictional unemployment

• Cyclical unemployment

• Structural unemployment

What does the natural rate of unemployment include?

• Only cyclical unemployment

• Only structural unemployment

• Only structural and frictional unemployment

• All types of unemployment