2.4-2.7 Macro Review

Is Point C a Recession or Expansion?

Finish the statement

Point C is a ​ (a)   because it shows ​ (b)   ​ (c)  

• Expansion

• recession
• high
• unemployment
• inflation
• low

What TYPE of inflation?

• Cost Push

• 1. Increased output! Growth! 

• Demand Pull

• 1. Loss of resources. (Ex: Natural disaster, expensive oil)

• Hyperinflation

• 1. Too much cash gets printed

Assume 2000 is the base year. What was their REAL GDP in 2015?

• $1000

• $1900

• $1500

• $1700

In the USA, what is our healthy GDP growth rate?

• 2-3%

• 4-5%

• 0%

• 2%

In the USA, what is our healthy or natural rate of unemployment (NRU) ?

• 2-3%

• 4-5%

• 0%

• 2%

In the USA, what is our healthy rate of inflation?

• 2-3%

• 4-5%

• 0%

• 2%

In 2001, Ecoland’s CPI was 110. What was the rate of inflation between 2001 and the base year?

• 10%

• 100%

• 1%

• 110%

The dollar value of all final goods and services produced within a country's borders in one year. Most important measure of economic growth

• Gross Domestic Product

• Real GDP

• GDP per capita

• Nominal GDP

GDP divided by the population. It identifies on average how many products each person makes. Best measure of standard of living

• GDP per capita

• Labor Force Participation Rate

• Income Approach

• Problems with the CPI

Who is hurt by unanticipated inflation?

• Lenders (people who lend money at fixed interest rates)

  People with fixed incomes

  Savers

• Above 16 years old

  Able/willing to work

  Not institutionalized (jail/hospital)

  Not in military, in school full-time, or retired

• Borrowers (people who borrow money)

  A business where the price of the product increases faster than the price of resources