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Macroeconomics EOCT Domain Review
Terms in this set (15)
The Consumer Price Index (CPI) is a measure of:
Which of the following is responsible for the monetary policy of the U.S.?
The Federal Reserve System.
How does an economist calculate the GDP for one year using the expenditure approach?
Add all amounts spent on the final goods and services.
What is the difference between Real GDP and Nominal GDP?
Real GDP= The constant price, Nominal GDP= Based on the current year's prices.
What are the leading economic indicators supposed to predict?
What is a business cycle?
A period of economic growth followed by economic contraction.
A period in a business cycle when real GDP stops falling:
What is a recession?
A period when real GDP falls for at least 6 months.
What does the unemployment rate represent?
The percentage of the total work force that is unemployed.
What is considered one cause of inflation?
Producers raise prices to meet increased costs.
What typically happens to the inflation rate when unemployment falls to very low levels?
According to the Principle of Cyclical Unemployment, what occurs when the demands for goods and services drops in a recession?
The demand for labor drops.
If you lived on a fixed income, how would you be affected by inflation?
You would be financially stressed because your income doesn't increase as those prices go up.
In a typical business cycle, what stage follows a peak?
How do fears of future economic problems affect GDP?
Consumers will spend less and save money in case future economic problems hit them- GDP will be reduced.
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