WorksheetsAP Macroeconomics Unit 2 Review
Total questions: 45
Worksheet time: 47mins
When people are in the process of looking for a job after being fired or are transitioning to a new position, this is called?
Frictional Unemployment
Structural Unemployment
Cyclical Unemployment
When people can't find a job because of a lack of demand for their skills or type of labor, this is called?
Frictional Unemployment
Structural Unemployment
Cyclical Unemployment
What measure shows how well the economy is doing over time?
Gross Domestic Product
Unemployment Rate
Inflation Rate
What measure shows what percentage of the eligible workers do not have jobs?
Gross Domestic Product
Unemployment Rate
Inflation Rate
What is GDP?
The dollar value of all final goods produced in a country's border in a given year
The dollar value of all goods and services produced in a country's border in a given year
The dollar value of all intermediate goods produced in a country's border in a given year
The dollar value of all goods and services consumed in a country's border in a given year
What is the equation for calculating GDP using the expenditures approach?
C + I + G + Xn
Wages + Rent + Interest + Profit
Value added at each stage of production
Exports - Imports
What is the labor force participation rate?
The percentage of the total population that is employed
The percentage of the labor force that is unemployed
The percentage of the total population that is in the labor force
The percentage of the labor force that is not in the labor force
Who is considered frictionally unemployed?
People who are between jobs
People who do not have the right skills
People who are unemployed due to a recession
People who have given up looking for work
What type of unemployment occurs when the economy is in a recession?
Frictional unemployment
Structural unemployment
Cyclical unemployment
All types of unemployment
What is the definition of inflation?
An increase in the general level of prices for goods and services
A decrease in the general level of prices for goods and services
An increase in the supply of money
A decrease in the supply of money
What is the difference between nominal GDP and real GDP?
Nominal GDP is adjusted for inflation, while real GDP is not
Real GDP is adjusted for inflation, while nominal GDP is not
Nominal GDP includes intermediate goods, while real GDP does not
Real GDP includes intermediate goods, while nominal GDP does not
Who is hurt by unanticipated inflation?
-Lenders (people who lend money at fixed interest rates)
-People with fixed incomes
-Savers
-Borrowers (people who borrow money)
-A business where the price of the product increases faster than the price of resources
-Above 16 years
-Able/willing to work
-Not institutionalized (jail/hospital)
-Not in military, in school full time, or retired
How do you calculate the unemployment rate?
(# unemployed/# in labor force) x 100
Frictional + structural unemployment
% change in prices = (year 2 - year 1)/(year 1) x 100
Why is zero percent unemployment not our goal?
Because people will always be between jobs or replaced by technology
The amount of employment that exists when the economy is healthy and growing
If people leave the labor force, the unemployment rate falls
some people are no longer looking for a job because they have given up
1. Consumer Spending
2. Investment (business spending on tools/equipment
3. Government spending (NOT transfer payments)
4. Net exports -- exports (x) - Imports (M)
Four components of GDP
factors of productivity
Major Economic Goals for Every Country
The Business Cycle
How do you calculate the inflation rate?
Rate of change = [(New - Old)/Old] x 100
Frictional + structural unemployment
(# unemployed)/(# in labor force) x 100
C + I + G + Xn
Discouraged workers: some people are no longer looking for a job because they have given up.
Underemployed workers: Someone who wants more hours but can't get them is still considered employed
criticisms of the unemployment rate
Labor Force Participation Rate
US is at full employment
zero percent unemployment is not our goal
Index numbers assigned to each year that show how prices have changed relative to a specific base year (base year given 100)
Price Indices
Causes of Inflation
Inflation
Full Employment Output
What is NOT included in GDP?
Intermediate goods
stocks, bonds, real estate
illegal activities
Used goods
All of these are correct.
Is this counted in the GDP of the US?
Cars made by a US company in South Korea.
Yes
No
Is this counted in the GDP of the US?
A farmer's purchase of a new tractor.
Yes
No
In which part of the GDP calculation does this fit?
You spend $15 at AMC to see the latest Avengers movie.
Consumer spending
Government spending
Investment spending
Net exports
In which part of the GDP calculation does this fit?
The US military spends $5 billion on five new helicopters.
Consumer spending
Government spending
Investment spending
Net exports
In which part of the GDP calculation does this fit?
Australia exported $6 billion worth of goods in 2018, but imported $10 billion in goods.
Consumer spending
Government spending
Investment spending
Net exports
The value of the final goods and services produced in a given year expressed in terms of the prices in a reference base year.
Real GDP
Gross Domestic Product
Business Cycle
Nominal GDP
Which of the following is NOT a phase of the Business Cycle?
Recession
Trough
Bubble
Expansion
Unemployment Rate =
population / # of unemployed X 100
(# of unemployed / # in the civilian labor force) X 100
# in the civilian labor force / # of unemployed X 100
Which of the following is an expansion, or recovery?
A
B
C
D
Which of the following is a trough?
A
B
C
D
Which of the following is a recession, or contraction?
A
B
C
D
Which of the following is a peak?
A
B
C
D
Unemployment measures...
the value of all final goods and services produced
an increase in the general price level
the percentage of people looking for work that can't find it
the economic freedom an economy offers
What is a limitation of using GDP to measure the standard of living?
Inequality in income distribution
Population growth rate
Environmental pollution during production
Corruption and harsh social conditions
The Labor Force Participation Rate is calculated using which formula?
LFPR% = (Unemployed)/(civilian population 16 and older) * 100
LFPR% = (Employed)/(civilian population 16 and older) * 100
LFPR% = (Labor Force)/(civilian population 16 and older) * 100
What is the correct equation to calculate the Consumer Price Index (CPI)?
(Current Market Basket/Base Market Basket) x 100
(Base Market Basket/Current Market Basket) x 100
(Current Market Basket/Current Market Basket) x 100
