Unemployment and Economic Measures
30 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What percentage of the labor force was fully employed during the Great Depression in the 1930s?

  • 15%
  • 50%
  • 10% (correct)
  • 25% (correct)

Who were among the most affected during the Great Depression?

  • The poor (correct)
  • The fully employed
  • Middle class workers
  • Wealthy individuals

What was a common work condition for those who kept their jobs during the Great Depression?

  • Working full-time
  • Working overtime
  • Working part-time (correct)
  • Working from home

In which decade did the Great Depression occur?

<p>1930s (C)</p> Signup and view all the answers

What is a significant outcome of unemployment highlighted in the content?

<p>Social stratification (C)</p> Signup and view all the answers

What distinguishes the Chained CPI from the traditional CPI?

<p>It uses variable weights rather than fixed weights. (A)</p> Signup and view all the answers

In what year was the Chained CPI introduced by the BLS?

<p>2002 (C)</p> Signup and view all the answers

Why is the Chained CPI considered an improvement over the traditional CPI?

<p>It captures substitution effects in consumer behavior. (A)</p> Signup and view all the answers

What aspect of the Chained CPI differs from the GDP deflator?

<p>Chained CPI focuses solely on consumer prices. (C)</p> Signup and view all the answers

What statistical method is used to determine inflation using the CPI method?

<p>Weighted average of price changes (B)</p> Signup and view all the answers

What is one of the consequences of inflation?

<p>Decreased purchasing power (A)</p> Signup and view all the answers

How is purchasing power defined?

<p>The value of a consumer's dollar (A)</p> Signup and view all the answers

Which statement about inflation is true?

<p>It reduces consumers' ability to buy goods (C)</p> Signup and view all the answers

Which outcome does inflation not directly cause?

<p>Increased competitiveness in markets (D)</p> Signup and view all the answers

What effect does inflation have on consumer behavior?

<p>Promotes immediate spending due to declining value of money (A)</p> Signup and view all the answers

What happens to the purchasing power of individuals on a fixed income when prices rise?

<p>It decreases. (D)</p> Signup and view all the answers

Which statement best describes the relationship between fixed income and rising prices?

<p>Rising prices lead to a decline in real income for fixed income earners. (B)</p> Signup and view all the answers

What is the effect of inflation on those with fixed incomes?

<p>Their ability to purchase goods and services diminishes. (B)</p> Signup and view all the answers

How does a decrease in real income impact individuals on a fixed income?

<p>Their purchasing power declines. (A)</p> Signup and view all the answers

Which of the following best defines purchasing power?

<p>The amount of goods one can buy with their income. (D)</p> Signup and view all the answers

What does per-capita output growth measure?

<p>Growth rate of output per person in the economy (A)</p> Signup and view all the answers

Which formula correctly represents per-capita output?

<p>Total output divided by total population (A)</p> Signup and view all the answers

What is the significance of measuring per-capita output growth?

<p>It provides insight into the average economic output per individual (B)</p> Signup and view all the answers

If per-capita output growth is increasing, what can be inferred about the economy?

<p>The output per person is improving (D)</p> Signup and view all the answers

Which factor might negatively impact per-capita output growth?

<p>Increase in population without corresponding output growth (A)</p> Signup and view all the answers

What is the minimum age for a person to be considered employed according to the definition provided?

<p>16 years old (C)</p> Signup and view all the answers

How many hours per week must a person work to be considered employed?

<p>1 or more hours (C)</p> Signup and view all the answers

In which of the following situations is a person considered employed?

<p>A person working for pay in their own business for 3 hours (A)</p> Signup and view all the answers

Which of the following best defines the term 'employed' in this context?

<p>Any person who works for pay for 1 hour or more per week (A)</p> Signup and view all the answers

Which condition is NOT part of being classified as employed?

<p>Having a permanent contract (A)</p> Signup and view all the answers

Flashcards

Great Depression Unemployment

Significant unemployment in the 1930s, impacting a quarter of the workforce, and even those employed often worked part-time.

Labor Force Impact

Unemployment in the 1930s severely affected a significant portion of the workforce.

Part-time Work

Even with jobs, many individuals worked fewer hours.

Economic hardship

Unemployment led to significant financial difficulties for many.

Signup and view all the flashcards

1930s Unemployment

High unemployment rates in the 1930s.

Signup and view all the flashcards

Inflation's Impact

Inflation reduces the value of money, making goods and services more expensive.

Signup and view all the flashcards

Purchasing Power

The ability to buy goods and services with a given amount of money.

Signup and view all the flashcards

Inflation Cost 1

A decrease in the value of a currency, making items and services more expensive.

Signup and view all the flashcards

Consumer's Dollar

The amount of money a consumer has to buy goods and services.

Signup and view all the flashcards

Value of Money

How effective a currency is in acquiring goods and services.

Signup and view all the flashcards

Fixed Income

An income that remains the same regardless of external factors like inflation.

Signup and view all the flashcards

Rising Prices

An increase in the cost of goods and services.

Signup and view all the flashcards

Purchasing Power

The ability to buy goods and services using your income.

Signup and view all the flashcards

Falling Purchasing Power

Reduced ability to buy goods and services, often due to rising prices with a fixed income.

Signup and view all the flashcards

Real Income

Income adjusted for inflation, representing the true buying power.

Signup and view all the flashcards

Chained CPI

A CPI version using changing weights instead of fixed weights, published by the BLS in 2002.

Signup and view all the flashcards

CPI

A measure of inflation that tracks the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Signup and view all the flashcards

Fixed Weights

Weights that don't change over time in CPI calculations.

Signup and view all the flashcards

Changing Weights

Weights that reflect how consumer spending changes over time in CPI calculations.

Signup and view all the flashcards

Inflation measurement using CPI

Inflation is measured by tracking the price changes to a set of goods and services over time, showing how prices change overall using CPI.

Signup and view all the flashcards

Per Capita Output Growth

The rate at which output per person in an economy increases.

Signup and view all the flashcards

Output per Person

The amount of goods and services produced by an average person in the economy.

Signup and view all the flashcards

Total Output

The total amount of goods and services produced in an economy.

Signup and view all the flashcards

Total Population

The entire number of people living in an economy.

Signup and view all the flashcards

Output/Population Ratio

The result of dividing total output by the total population, frequently used to measure per capita output.

Signup and view all the flashcards

Employed Person

Someone aged 16 or older who works for pay, either for someone else or their own business, for at least one hour per week.

Signup and view all the flashcards

Unemployment Measurement

The process of determining the number of unemployed people in a population.

Signup and view all the flashcards

Hours Requirement (employed)

At least one hour per week is needed for someone to be considered employed.

Signup and view all the flashcards

Pay for work

The method for distinguishing employed individuals by requiring a payment or compensation.

Signup and view all the flashcards

Minimum Age

The minimum age to be considered as employed is 16 years.

Signup and view all the flashcards

Study Notes

Unemployment

  • Unemployment is a key macroeconomic measure, indicating the economy's health
  • It helps determine government policy on spending and taxes (fiscal policy) and interest rates (monetary policy)
  • Measurement of unemployment:
    • Employed: any person 16 or older working for pay (at least 1 hour per week) for someone else or in own business
    • Employed: working without pay in a family enterprise for 15+ hours per week
    • Employed: having a job but temporarily absent (with or without pay) due to illness, bad weather, vacation, labor disputes, or personal reasons
    • Unemployed: not employed, fall into two categories:
      • Not in the labor force: not looking for work (lost hope of finding or doesn't want a job)
      • Unemployed: actively looking for work but cannot find a job
  • Unemployment Rate: (Unemployed / Labor Force) * 100%
  • Labor Force Participation Rate = (Labor Force / Population) * 100%

Inflation and Deflation

  • Inflation: a rise in the general price level of goods and services
  • Deflation: a fall in the general price level of goods and services
  • Two measures of inflation:
    • GDP deflator
    • Consumer Price Index (CPI)
  • CPI: measures the average price level of a basket of goods and services consumed by urban households over time.
    • Used to estimate inflation/deflation rate
    • Influences monetary policy decisions of Federal Reserve

Long-Run Growth

  • Output growth: the rate of output of the entire economy grows
  • Per capita output growth: the rate of output per person in the economy (ratio of total output/total population)
  • Output per worker (labor productivity): output/number of workers
  • Factors determining output growth:
    • Increase in number of workers (quality)
    • Increase in capital
    • Technological improvements

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Related Documents

Chapter 7 Unemployment, Inflation, and Long-Run Growth PDF

Description

This quiz explores key concepts related to unemployment as a macroeconomic measure, its impact on fiscal and monetary policy, and how it is calculated. Test your understanding of employment classifications, unemployment rates, and labor force participation.

More Like This

Use Quizgecko on...
Browser
Open
Browser
Browser