Ch.13-.-Measuring the Economy!

1. 13.2: How do economists measure the size of our economy?

1.1. KEY #1: They study the economic decision making of individuals. They also households, and firms.

1.2. KEY #2: GDP is also another way of measuring the size of our economy.

1.3. KEY #3

1.4. TERM #1: GDP is goods and services must be produced within the country’s borders.

1.5. TERM #2

1.6. IMAGE

2. 13.3: What does the unemployment rate tell us about an economy's health?

2.1. KEY #1: When the economy is healthy and growing, it experiences little cyclical unemployment. But there will always be some frictional, seasonal, and structural unemployment. Some people will always be out of work, even in an economy with full employment.

2.2. KEY #2: The BLS reports the total number of people who were unemployed for the previous month. To arrive at this figure, the BLS does not attempt to count every job seeker in the country.

2.3. KEY #3

2.4. TERM #1: BLS

2.5. Term #2: Unemployed

3. 13.4 : What does the inflation rate reveal about an economy's health?

3.1. KEY #1: An economy shrinks during contraction But grows as it expands.

3.2. KEY #2: A business cycle has four cycles. The 1st is expansion, 2nd is peak, 3rd is contraction, and 4th is trough.

3.3. KEY #3

3.4. TERM #1: Contraction

3.5. TERM #2: Trough

4. 13.5: How does the business cycle relate to economic health?

4.1. KEY #1: The peak is the end of expansion and the start of contraction.

4.2. KEY #2

4.3. KEY #3

4.4. TERM #1: Contraction

4.5. TERM #2: Peak