CH.

13

1. The gross domestic product is = the market value of all final goods
and services produced within a country during a period of time.
2. In trillions, if household consumption is $9.7, business investment is
$2.1, government purchases is $2.7, and net exports are -$0.7, the
GDP is = $13.8 trillion
3. The real GDP allows us to compare the total output of an economy
from year to year because it = measures the output of an economy in
constant dollars.
4. Economists use per capita GDP to compare = the standards of living
of two or more countries.
5. When calculating the size of the labor force, the Bureau of Labor
Statistics counts not only people who are employed, but also =
unemployed people who are actively seeking work.
6. You are a travel agent with 20 years of experience, but your
customers now book their own travel using the Internet. You are
experiencing = structural unemployment.
7. The natural rate of unemployment is the percentage of = jobs and
workers that are not yet matched together during a time of full
employment.
8. The unemployment rate is an imprecise indicator of economic health
because it does not include = involuntary part-time workers.
9. The Bureau of Labor Statistics uses the consumer price index to =
track inflation.
10. A pair of shoes cost $4 in 1958 and $50 in 2014. The average wage
in 1958 was $2 per hour. If the real cost of both pairs is the same, =
the average wage in 2014 was $25.
11. The situation in which prices skyrocket and people lose confidence
in currency as a store of value is called = hyperinflation.
12. When households, businesses, government, and foreign buyers try
to purchase more goods and services than the economy can produce,
the result is = demand-pull inflation.
13. What is the order of the four phases of the business cycle? =
expansion, peak, contraction, trough
14. The Census Bureau's monthly estimate of housing starts is a =
leading economic indicator.
15. How do economists judge when the economy is in a recession? =
after a decline in economic activity lasting at least six months
16. What can trigger a recovery from a recession? = all of the above
17. Gross domestic product is limited as a measure of the overall
health of an economy because it = all of the above
18. As a country's per capita GDP increases, literacy rates increase,
life expectancy rises, and = standards of living improve.
19. How does high unemployment affect the economy? = The real GDP
decreases
20. Which of the following may distort the CPI and make the reported
inflation rate less than accurate? = substitution bias