Download Review for Standard 1 Test

1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
136.2 140.3 144.5 148.2 152.4 156.9 160.5 163.0 166.6 172.2 176.9
What does the figure for the year 2008 tell us about the
average price of goods and services in that year?
The average price has risen:
1.
2.
3.
4.
172.2% since 2007.
72.2% since 2007.
72.2% since the base year.
172.2% since the base year.
CONSUMER PRICE INDEX
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
136.2 140.3 144.5 148.2 152.4 156.9 160.5 163.0 166.6 172.2 176.9
What does the figure for the year 2008 tell us about the
average price of goods and services in that year?
The average price has risen:
1.
2.
3.
4.
172.2% since 2007.
72.2% since 2007.
72.2% since the base year.
172.2% since the base year.
CONSUMER PRICE INDEX
Remember:
The base year is assumed to be 100
The value of each transaction would be included in
which category of the GDP?
1.
Home Depot buys new shelving for its stores from a
U.S. desk manufacturer.
2.
A family buys a new car from a U.S. automobile
company.
3.
Fire department buys new computers for its office
from a U.S. computer manufacturer.
GDP
The value of each transaction would be included in
which category of the GDP?
1.
Home Depot buys new shelving for its stores from a
U.S. desk manufacturer. - Investment (Business)
2.
A family buys a new car from a U.S. automobile
company. – Consumer Sector
3.
Fire department buys new computers for its office
from a U.S. computer manufacturer. - Government
GDP
In terms of supply and demand what is occurring
during
1.
Economic growth
2.
Economic decline
3.
Economic stability
Where is each of these periods
in the business cycle?
GDP/BUSINESS CYCLE
In terms of supply and demand what is occurring
during
1
2
3
1.
Economic growth
2.
Economic decline
3.
Economic stability
Supply
Demand
Where is each of these periods
in the business cycle?
Demand
exceeds
Supply
Supply
exceeds
Demand
Supply &
Demand
roughly
equal
3
1
2
3
GDP/BUSINESS CYCLE
What does the Gross Domestic Product (GDP)
measure?
GDP
What does the Gross Domestic Product (GDP)
measure?
A nation’s output or productivity
GDP
Inflation would MOST likely be caused by:
1.
Congress cuts funding for building roads
2.
Workers being laid off
3.
Rise in business production costs
4.
The GDP decreases
GDP/BUSINESS CYCLE
Inflation would MOST likely be caused by:
1.
Congress cuts funding for building roads
2.
Workers being laid off
3.
Rise in business production costs
4.
The GDP decreases
GDP/BUSINESS CYCLE
If the GDP was $430 billion one year and $370 billion
the next year, what is likely happening with:
1.
Inflation
2.
Unemployment
GDP
If the GDP was $430 billion one year and $370 billion
the next year, what is likely happening with:
1.
Inflation
Remember:
2.
Unemployment
GDP is decreasing
GDP
How are aggregate demand and aggregate supply
related to the Gross Domestic Product (GDP)?
GDP
How are aggregate demand and aggregate supply
related to the Gross Domestic Product (GDP)?
The GDP measures the productivity of a country
during a given timeframe. Aggregate Supply and
Demand statistics are related to how the economy
is performing.
GDP
In the table, determine if there is an increase or
decline.
GDP
super inflation
stagflation
deflation
GDP/BUSINESS CYCLE
CPI
Unemployment
In the table, determine if there is an increase or
decline.
GDP
CPI
Unemployment
super inflation
stagflation
deflation
GDP/BUSINESS CYCLE
Remember: During stagflation, the indicators do not
react (increase or decrease) in a normal manner
What method is used to determine the CPI?
(not asking for the equation)
GDP
How is the CPI determined?
The government surveys the prices for a market basket of
goods.
GDP
What kind of Unemployment is represented by:
1.
When a fundamental change in economy reduces
the demand for certain workers.
2.
Workers are laid off due to weather or changes in
demand for certain products.
3.
Employees are long-term unemployed, or in the
process of changing jobs.
4.
Changes in technology cause companies to fire
workers.
GDP/BUSINESS CYCLE
What kind of Unemployment is represented by:
1.
When a fundamental change in economy reduces
the demand for certain workers. - Cyclical
2.
Workers are laid off due to weather or changes in
demand for certain products. - Structural
3.
Employees are long-term unemployed, or in the
process of changing jobs - Frictional
4.
Changes in technology cause companies to fire
workers. - Structural
GDP/BUSINESS CYCLE
What does each letter in the GDP formula mean?
GDP
What does each letter in the GDP formula mean?
Remember: G + C + I + (X - M)
GDP
G-overnment Sector
C-onsumption Sector (Consumer spending)
I-nvestment Sector (Business)
X – Exports
M – Imports
If the GDP was $450 billion one year and $495 billion
the next year, what is likely happening with:
1.
Inflation
2.
Unemployment
GDP
If the GDP was $450 billion one year and $495 billion
the next year, what is likely happening with:
1.
Inflation
Remember:
2.
Unemployment
GDP is increasing
GDP
An assembly line worker in an automobile plant is
laid off during a recession. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
An assembly line worker in an automobile plant is
laid off during a recession. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
A worker in an automobile plant is laid off due to
retooling the factory. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
A worker in an automobile plant is laid off due to
retooling the factory. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
A worker in an automobile plant is fired due to
constantly being late to work. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed.
GDP
A worker in an automobile plant is fired due to
constantly being late to work. She is
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
If a college graduate is looking for a job for the first
time he is:
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed.
GDP
If a college graduate is looking for a job for the first
time he is:
1.
Seasonally unemployed.
2.
Frictionally unemployed.
3.
Cyclically unemployed.
4.
Structurally unemployed
GDP
When GDP is beginning to decrease and
unemployment is increasing, the
economy is said to be in :
1.
Recession
2.
Recovery
3.
Trough
4.
Peak
GDP
When GDP is beginning to decrease and
unemployment is increasing, the
economy is said to be in :
1.
Recession
2.
Recovery
3.
Trough
4.
Peak
GDP
Remember:
During contraction,
GDP and CPI are
decreasing;
unemployment is
increasing
Recession and
Depression are
related to economic
contraction.
What is the definition of a Recession?
What are the characteristics of a Depression?
GDP
What is the definition of a Recession?
Two
or more quarters of negative GDP growth
What are the characteristics of a Depression?
Period
of contraction marked by hyper
unemployment (25%+), idle industrial resources,
shortages of goods and a collapse of the stock
market
GDP
What is the relationship of the federal deficit to the
federal debt?
MONETARY/FISCAL POLICY
What is the relationship of the federal deficit to the
federal debt?
The
federal budget deficit is the amount each
year by which federal outlays (spending) exceed
federal receipts (income).
The
federal debt – the amount the government
owes – grows during periods of deficit spending.
MONETARY/FISCAL POLICY