18 Questions
What is the definition of economic growth?
An increase in real GDP or real GDP per capita over a certain time period
What is the formula to calculate the rate of economic growth?
New RGDP - Old RGDP / Old RGDP * 100
What is the rule of 70 used to approximate?
The number of years required to double real GDP
What is the result of a decline in real GDP?
A significant increase in unemployment
What is the term used to describe the alternating rises and declines in the level of economic activity?
The business cycle
What is the outcome of rapid economic growth?
Rapid inflation
What is the characteristic of the economy during the peak phase of the business cycle?
The economy is at full employment and the price level is likely to rise.
Which of the following groups is categorized by the Bureau of Labor Statistics as 'not in the labor force'?
People who do not fit either of the above two categories.
What is the characteristic of the trough phase of the business cycle?
Output and employment bottom out at their lowest levels.
What is the characteristic of the recession phase of the business cycle?
A period of decline in total output, income, employment, and trade.
What is the characteristic of the recovery phase of the business cycle?
Output and employment rise toward full employment.
Who is counted as being in the labor force?
Both those who are employed and those who are unemployed but actively seeking work.
What is the labor force?
The total number of workers, including the employed and unemployed
How is the labor force participation rate calculated?
Labor force / population
What is the unemployment rate a measure of?
The percentage of the labor force unemployed
What type of unemployment results from the labor market not operating perfectly?
Frictional unemployment
What is a characteristic of structurally unemployed workers?
They need retraining or additional education to find a new job
What is the formula for calculating the unemployment rate?
Unemployment rate = (unemployed / labor force) x 100
Test your understanding of macroeconomic instability, including economic growth, business cycles, unemployment, and inflation. Measure your knowledge of real GDP and its impact on economic growth rates.
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