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A particularly severe recession is called a:

Depression

The Great Depression:

was a period of low production and high unemployment.

To say someone has a comparative advantage in the writing of an economics books means:

he has a low opportunity cost for writing an economics book.

A key indicator of the hardship experienced during the Great Depression is the:

high rate of unemployment.

If the borrower and lender agree to a loan at 8% when the inflation rate is 3%, then the 8% is the____interest rates and 5% is the____interest rate.

nominal/real

____is/are the market value of all final goods and services produced within a country during a given period of time.

GDP

If the unemployment rate increases from 4% to 10%, then the economy is most likely in a(n):

recession

The real interest rate equals the:

nominal interest rate minus the inflation rate.

Inflation exists when:

prices on average are higher.

It is difficult to engage in long-term financial planning when inflation is:

high and erratic

If the market interest rate is 10% and the inflation rate is 3%, then the real interest rate is:

7%

The unemployment rate is the:

percentage of the labor force that is out of work.

Unexpectedly high inflation____borrowers and____lenders.

helps/hurts

Frictional unemployment may be economically beneficial if:

it leads to a better match between worker and job.

Real GDP is GDP adjusted for:

inflation

Unemployment typically____ the onset of a recession.

increases after

Economic activity moves from a peak into a period of____until it reaches a____and then into a period of____.

recession/trough/expansion or recovery.

If a borrower and lender agree to an interest rate on a loan when inflation is expected to be 10% and inflation turns out to be 7% over the life of the loan, then the borrower____and the lender____.

loses/gains

For a given nominal interest rate, an unexpectedly high inflation rate____the real interest rate.

decreases.

Hector looked for a job for five weeks after finishing college. He turned down several jobs that didn't use his skills, but now has a job requiring the expertise he gained in college. This is an example of:

Frictional Unemployment

The unemployment rate in the United States:

never falls to zero.

The difference between Nominal GDP and Real GDP is:

Real GDP is valued in constant prices (adjusted to inflation).

In reference to short-term economic fluctuations, the "trough" refers to:

the low point of economic activity prior to a recovery.

If the real interest rate is 3% and the inflation rate is 7%, then the nominal interest rate equals:

10%.

In reference to short-term economic fluctuations, the "peak" refers to:

the high point of economic activity prior to a downturn.

Goods and services that are consumed by the ultimate user are called___goods and services.

value added

The value of unpaid childcare services provided by a stay-at-home dad___included in GDP and the value of daycare services purchased from a licensed childcare provider____included in GDP.

is not/is

Typically unemployment____during a recession and____during an expansion.

rises/falls

Unexpectedly low inflation____borrowers and____lenders.

hurts/helps

A measure of GDP in which quantities produced are valued at current-year pries is called:

real GDP.

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