GDP, Unemployment and Inflation

GDP Business Cycle

GDP Growth

Unemployment Inflation

10 10 10 10 10

20 20 20 20 20

30 30 30 30 30

40 40 40 40 40

50 50 50 50 50

Question 1 - 10

• The four part definition of GDP.

Answer 1 – 10

• What is the total value of all final goods and services produced in a country in a given year?

Question 1 - 20

• Goods that are used in the production of other goods.

Answer 1 – 20

• What are intermediate goods?

• Bonus 10: Are intermediate goods counted in GDP? Explain.

Question 1 - 30

• GDP expressed in constant, unchanging dollars. In other words, GDP adjusted for inflation.

Answer 1 – 30

• What is real GDP?

• Bonus 10: What is other type of GDP? Explain.

Question 1 - 40

• This approach to calculating GDP adds up all the incomes in an economy in a given year.

Answer 1 – 40

• What is the income approach?

• Bonus 10: What is the other approach, and what categories go into calculating it?

Question 1 - 50

• Wood used to make a desk would count as GDP, true or false?

Answer 1 – 50

• What is false?

Question 2 - 10

• A period of 6 months or more of negative GDP growth.

Answer 2 – 10

• What is a recession?

Question 2 - 20

• This economic problem is associated with troughs in the business cycle.

Answer 2 – 20

• What is unemployment?

Question 2 - 30

• This is a particularly deep recession with high levels of unemployment.

Answer 2 – 30

• What is a depression?

Question 2 - 40

• After inflation, we see the business cycle do this.

Answer 2 – 40

• What is contract?

Question 2 - 50

• Peaks in the business cycle are associated with this type of economic problem.

Answer 2 – 50

• What is inflation?

Question 3 - 10

• Imports are greater than exports. GDP would...

Answer 3 – 10

• What is decrease?

Question 3 - 20

• This measures a nation’s standard of living.

Answer 3 – 20

• What is real GDP per capita?

• Bonus 10: What exactly is real GDP per capita?

Question 3 - 30

• The federal government buys 5 billion paper clips. We can expect GDP to...

Answer 3 – 30

• What is increase?

Question 3 - 40

• The invention of the iPhone increased productivity overall. We would expect GDP to...

Answer 3 – 40

• What is increase?

Question 3 - 50

• A divorce lawyer is paid for his services. Paid well. As in bathing in obscene amounts of cash. We can expect GDP to...

Answer 3 – 50

• What is increase?

• Bonus 10: This question goes towards a limitation of GDP measurement. What is that limitation and explain?

• Bonus 10: Give another limitation of GDP.

Question 4 - 10

• The percentage of the total work force that is unemployed

Answer 4 – 10

• What is the unemployment rate?

Question 4 - 20

• Lifeguards that lose their job after summer is over suffer from this type of unemployment.

Answer 4 – 20

• What is seasonal unemployment?

Question 4 - 30

• A steel mill worker lost his job because his factory shut down completely. This represents this type of unemployment.

Answer 4 – 30

• What is structural unemployment?

Question 4 - 40

• Mitt Romney was once the Governor of Massachusetts, but now works at Walgreens as a cashier. He is...

Answer 4 – 40

• What is underemployed?

Question 4 - 50

• Discouraged workers are counted in the unemployment rate, true or false?

Answer 4 – 50

• What is false?

Question 5 - 10

• A change in prices over time.

Answer 5 – 10

• What is inflation?

Question 5 - 20

• Inflation caused by too much money in the economy is explained by this theory.

Answer 5 – 20

• What is the quantity theory?

Question 5 - 30

• As inflation increases, this decreases, which does not allow you to buy as many goods and services as before.

Answer 5 – 30

• What is purchasing power?

Question 5 - 40

• Tickle Me Elmo dolls are in high demand, but there’s not enough of them. To reduce demand, Sesame Street raises the price on all Tickle Me Elmos. This cause of inflation is explained by which theory?

Answer 5 – 40

• What is the demand-pull theory?

• Bonus 10: The situation where we have too much demand and not enough supply.

Question 5 - 50

• The cost of oil goes up, which forces the producer to increase the price of plastic bottles, increasing inflation. This cause of inflation is explained by which theory?

Answer 5 – 50

• What is the cost-push theory?