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27 Cards in this Set
- Front
- Back
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what is not considered part of government purchases?
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Welfare benefits
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Labor productivity will increase if the ___ increases and _____
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Quantity of capital per hour worked; technology improves
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The measure of production that values output using base-year prices is called
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real GDP
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If inflation increases unexpectedly, then
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lenders recieve a lower real interest rate than they expected
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If you want to earn a real interest rate of 3% on money you lend
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5%
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the demand for print advertising has ____, and this has ____ unemployment
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declined; increased
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Potential GDP is defined as
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the level of GDP attained when all firms are producting at capacity
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which of the following is counted in GDP?
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the cost of a speed boat purcahsed by drug smugglers
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knowledge capital is ____ in production and ____. as a reult, firms ____ free trade
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Nonrival; nonexcludable; can
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describes the impact of the rule of law
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countries with a strong rule of law have faster economic growth
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If a German firm produces cars in the US, that production should count towards
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U.S. GDP
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Foreign direct investment occurs when a Chinese corporation
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opens a new factory in France
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Costco pays its employees higher wages
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higher wages increase the productivity
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A decrease in the real investment rate will
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increase consumption and investment
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Scott is a woodworker
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GDP is not affected by Scott's production of the jewelry box
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because ______ in the government budget deficit increase the real interest rate, budget deficits can ___ firm investment
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increase; decrease
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this is included in GDP for an economy in a given year
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The value of final goods produced in that year
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Jack just told his boss that he thinks his boss is an idiot
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frictional
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a full-time student who is not working
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not in the labor force
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a final good is one that
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is purcahsed by its final user
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why many European countries have unemployment rates
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European countries offer higher unemployment benefits
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The Sovient Union consistently increased the amount of capital available
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diminishing returns to capital
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When the economy reaches a trough in a business cycle
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income, production, and employment will begin to rise
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causes the unemployment rate to understate
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discouraged workers are NOT counted as unemployed
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When production in an economy grows more quickly
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Real GDP per capital is rising
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Discouaged workers are
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workers who have stopped looking for work
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when the labor force is at full employment
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there is no cyclical unemployment in the economy.
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