GDP, Unemployment, and Inflation Econ Review

What does GDP stand for?

• Gross Domestic Profit

• Gross Domain Product

• Gross Domain Profit

• Gross Domestic Product

All of the following are “natural” types/causes of unemployment EXCEPT

• Unstructured

• Frictional

• Seasonal

• Cyclical

What should the “normal” or “acceptable” inflation rate be?

• 2-3%

• 3-5%

• 10-15%

• 20-23%

What does GDP measure?

• The strength and growth of our economy

• The inflation rate of our economy

• The money supply of the United States

• The debt America owes other nations

What should the “normal” or “acceptable” unemployment rate be?

• 1-10%

• 2-3%

• 3-5%

• 10-12%

What might someone say if they think minimum wage is a good thing.

• Minimum wage forces workers to leave the country when their jobs are “offshored.”

• Minimum wage allows low-income workers to make enough money to survive.

• Minimum wage leads employers to cut costs by firing many of their workers.

What might someone say if they think minimum wage is a bad thing. . .

• Minimum wage can lead to employers firing employees to cut costs

• Minimum wage leads employers to hire more employees

• Minimum wage helps poor workers make enough money to live a better life.

Which of the following best defines “inflation”?

• A decrease in prices and an increase in the value of money

• A sudden decrease in prices and an increase in the value of money

• An extraordinary increase in prices that often causes an economic failure

• An increase in prices and a decrease in the value of money.

Which of the following correctly identifies the effect that inflation has on the purchasing power of money?

• Inflation has a positive effect on purchasing power because there is an increase in the value of the dollar.

• Inflation has a positive effect on interest rates, which raises the value of the dollar.

• Inflation has a negative effect on purchasing power because the value of the dollar decreases

• Inflation has a negative effect on purchasing power because the value of the dollar increases.

What is the definition of unemployment?

• Someone without a job, because it is winter
• Someone without a job, but who is looking
• Retirees without jobs, just hanging out
• Teenagers without jobs, but in high school