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How do economist and our book describe what the technical definition of unemployment is
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Terms in this set (72)
structural unemployment occurs whenWorkers do not have the skills required to fill the vacant positions in the job market.What if there is someone who doesn't have experience using excel and is unable to find work because all of the available jobs require a certain minimum knowledge of creating graphs using excelStructurally unemployedLayoffs due to an economic downturn describes what kind of unemploymentCyclicalThe lowest level of unemployment compatible with price stabilityIs referred to as full employment.If the unemployment rate drops under the rate that coincides with "full employment" what do our models say will happenIncreased inflationary pressuresnatural rate of unemploymentfrictional unemployment + structural unemploymentThe outsourcing of jobs has costs and benefits to a domestic economy. It cost those working in those outsourced position their jobs while expanding what is possible to produceTrueA college student who isn't working and is not actively seeking a job would be which of the followingNot in the labor forceInflation isAn increase in the average level of prices of goods and servicesDeflation is a (blank) in the average level of prices and goods and servicesDecreaseWhat does the book say happens when there is unanticipated inflationDebtors are better off and creditors are worse offWhat does this graph say about purchasing powerDecreased because real income decreasedMoney illusion is theUse of nominal dollars rather than real dollars to gauge income or wealth.How does inflation affect production decisionsCauses business to be more cautious since the future appears more uncertainInflation causes uncertainty in an economy, this can cause changes inConsumption saving and investment behaviorSpeculation during periods of inflation can result in all of the following exceptMore resources going into the production process.During a period of deflationPeople on fixed incomes are better offWhat is the consumer price indexA measure of changes in the average price of consumer goods and servicesTo construct the Consumer Price Index, the Bureau of Labor Statistics must:Find out what people buy with their incomes and how the prices of what they buy change.Real gdp is theValue of final output produced, adjusted for changing prices.If some specific prices fall, some relative prices rise, and average prices remain unchanged, there has been a period ofStable price levels.When consumers try to purchase more goods and services than the economy can produceDemand pull inflationSupply chain issues due to forest fires or cyber attacks may it make it more expensive to produce goods/services in the economyCost push inflationWhat inflation rate is best for a healthy economyA rate that has the least effect on the Behavior of companies investors consumers and workersIf someone's nominal income increases faster than the price level has increased thenYour real income has risenOf the following, which see increases in real income with the wealth effects of inflationPeople who own assets that are appreciating faster than the inflation rateWhich of the following groups is protected from a sudden increase in inflationBorrowers who have loans at fixed interest ratesAn increase in the quantity of aggregate demand from interest rateMove on same lineIncrease in consumer spendingShift to rightStop prices increase aggregate demand increaseNew building permits lowerAd would decreaseEquipment orders increaseAd increaseComponents of Aggregate Demandconsumption, investment, government spending, net exportsconsumption expenditureAccount for over two thirds of total spendingIf consumption is 340 and saving 20 then disposable is360When the APC is greater than 1, the APS must benegativeMonths or years of economic growth and decline illustrated in changes of real gdp defineThe business cycleThink of classical theory as described by the book and pick which of the followingFlexible wages and prices allow a laissez fairer economy to adjust wages and prices to shifts in ADWhat does it say happens when consumer demand declinesPrices would decrease and the economy would return to its long term growth trendUnlike the classical economists, Keynes asserted thatThe economy was inherently unstable.Which of the following economic perspectives focuses on the need for government to use spendingKeynesianIdeas provided by Keynes suggest that this can be used to correctDecrease government purchasesIncreased and decreased in real gdp across time are useful when measuringBusiness cyclesDeterminants of macro performance work on macro outcomes throughAggregate supply and demandSelect the answer that tells what the aggregate demand curve is all aboutHow total quantity of output demanded values with the average price levelThe aggregate demand curve is downward sloping becauxePeople buy more goods and services at lower average pricesWhich of the following would depict a move along the ad curveAll the aboveThe real balances effect says that an increase in the price of levelReduced the real value of a fixed amount of savingsFrom our understanding of the relationship between the factors of production and the supply curveHigher costs are reflected in higher average pricesSay aggregate quantity being supplied at a particular price is higher than the ad quantityA surplus causes the price level to fallCeteris Paribus the price level will decrease if the aggregatedemand curve shifts leftWhich of the following describes the relative change in total spending from an increase of incomeMpcAs wealth fallsThe ad curve will shift to the leftIf tax policies become more favorableThe ad curve will shift to the rightIf it becomes easier to take out a loan then what would happen in the short runAd curve will shift to the rightWhat would a drop in interest rates do to investment spending by businessA riseIf the investment demand curve shifts to the left thenThe AD curve will shift to the left.If firms become more pessimistic about future sales, thenThe AD curve will shift to the left.What behavior dictates the exports for U.S companiesSpending and saving behavior of foreign consumers and businessesU.S exports would grow if what happenedIncrease in foreign consumer incomeSay an economy is currently at full employment what happens if the components of aggregate demandRecess gapIf overall consumption of the goods/services produced in an ecnonomy exceeds the level of gross domestic productInflationary gap