Macroeconomics Overview Quiz

Unemployment caused by the temporary nature of job transitions, including people looking for their first jobs or those moving between positions.

Unemployment caused by a mismatch between the skills workers possess and the skills demanded by employers, often due to technological advancements or industry shifts.

Unemployment caused by fluctuations in the business cycle. It rises during economic downturns (recessions) and falls during periods of economic growth (expansions).

Unemployment that occurs due to the seasonal nature of certain industries or occupations. It is predictable and temporary.

The level of employment considered 'normal' for an economy, accounting for frictional and structural unemployment.

The unemployment rate that is associated with full employment. It includes frictional and some structural unemployment, indicating a healthy economy.

One factor influencing the natural unemployment rate. Economies with a younger population tend to have more job seekers and higher frictional unemployment.

A factor influencing the natural unemployment rate. Significant changes in the economy, like automation or globalization, can lead to structural unemployment.

The difference between potential GDP, which is the maximum output possible with full employment, and the actual GDP produced when unemployment is higher than the natural rate.

A measure of how much the GDP shrinks for every 1% increase in the unemployment rate above the natural rate. Okun estimated this to be 2% for every 1% rise in unemployment.

The cost of searching for a job. When unemployment benefits are more generous, the opportunity cost of staying unemployed is lower, leading to a higher natural rate of unemployment.

A measure of the average price level paid by urban consumers for a fixed ‘basket’ of goods and services.

A sustained increase in the general level of prices in an economy.

A sustained decrease in the general level of prices in an economy.

A major economic problem where inflation is extremely high, usually over 50% a month. It erodes the value of money and causes economic instability.

The long-term rate of unemployment that exists even when the economy is at its full potential capacity.

A measure of the total value of goods and services produced in a country, adjusted for changes in prices, allowing for a more accurate comparison of economic output across different time periods.

The total value of goods and services produced in a country within a given period, calculated using current market prices, without adjusting for inflation.

The total demand for all goods and services in an economy at different price levels. This is the sum of all consumer, business, government, and foreign spending.

The total supply of all goods and services in an economy at different price levels. This represents the total amount that businesses are willing and able to produce.

An index of prices for all goods and services included in GDP. It measures changes in the general price level in the economy.

A basket of goods and services representative of an average urban household's spending, used to calculate the Consumer Price Index (CPI). Each item in the basket is weighted by its relative importance in the household budget.

The process of collecting price data for goods and services in the CPI basket each month. StatCan ensures that price changes are accurately recorded for the exact same item, accounting for any quality changes.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a basket of consumer goods and services.

The inflation rate is calculated as the percentage change in the CPI from one year to the next.

One limitation of the CPI is that it may not accurately reflect spending patterns of all households, as households have different spending preferences and priorities.

Another limitation of the CPI is that it is based on a standard family size of 4 members, which may not accurately reflect the size of all Canadian households.

The CPI may not fully account for quality changes in goods and services, which can affect the cost of living.

The CPI may not accurately reflect the impact of new products or technological advancements on consumer spending patterns.

The total demand for all goods and services in an economy.

The total value of all final goods and services produced in an economy over a specific period.

The change in the quantity of goods and services demanded at each price level.

The portion of GDP spent by consumers on goods and services.

The portion of GDP spent on new capital investments, like machinery, buildings, and equipment.

The portion of GDP spent by the government on goods and services, including infrastructure and social programs.

The net difference between exports (goods sold to other countries) and imports (goods purchased from other countries).

The total value of all goods and services produced in a society.

The AS curve is very elastic at low outputs because most resources are available, but becomes inelastic as prices rise and resources reach their limit.

If the price of inputs like land, labor, or capital increases, businesses can produce less at each price level, shifting the AS curve upwards and to the left.

New resources, more capital goods, or a larger workforce increase the capacity of the economy, shifting the AS curve downward and to the right.

Improvements in technology make workers more productive, allowing businesses to produce more with the same resources, shifting the AS curve downward and to the right.

An increase in demand for Canadian goods and services from other countries due to higher income levels in those countries.

A higher value of the Canadian dollar makes Canadian goods more expensive for foreign buyers, reducing demand.

The higher the value of the Canadian dollar, the less competitive Canadian products become in the global market.