Unit 4: Economic Indicators Study Guide Questions And Correct Answers

frictional unemployment {Ans: unemployment that occurs when people take time to find a job or are between jobs}Government Spending {Ans: spending by all levels of government on final goods and services}Real GDP {Ans: the production of goods and services valued at constant prices}buisness cycle {Ans: economic pattern of alternating periods of prosperity and decline.}Who is counted in the labor force? {Ans: Anyone who is 16 and older, willing and able to work}investment spending {Ans: spending on new productive physical capital, such as machinery and structures, and on changes in inventories}cost-push inflation {Ans: When prices rise due to an increase in the cost of production.}net exports {Ans: spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)}Nominal GDP {Ans: the production of goods and services valued at current prices}CPI Index {Ans: (cost of basket in current year/cost of basket in base year) x 100. A measure of inflation.}Inflation {Ans: A general and progressive increase in prices}structural unemployment {Ans: unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one}GDP