Chapter 13 Measuring the Economy

1. 13.4 What does the inflation rate tell us about the economy's health?

1.1. The BLS tracks inflation by gathering information on Americans’ cost of living.

1.2. Nomial and real cost of living is how much goods or services cost and they change a lot over time

1.3. In our real world, prices are always changing. The result can be creeping inflation, hyperinflation, or deflation.

1.4. inflation rate is the percentage increase in the average price level of goods and services from one month or year to the next.

1.5. Creeping inflation is a gradual rise of inflation over time.

2. 13.5 How does the business cycle relate to economic health?

2.1. The business cycle consists of four phases. These phases include a period of growth and a period of decline, as well as the turning points that mark the shift from one period to the next.

2.2. Business cycles are popularly known as periods of boom and bust. A boom is the expansion phase of the cycle. It may also be known as a recovery, upturn, upswing, or period of prosperity. All these terms mean the same thing, the economy is healthy and growing

2.3. leading economic indicators are used to forecast the peak and trough of a business cycle

2.4. inventory is merchandise that companies or stores have on hand

2.5. A depression is a prolonged economic downturn characterized by a plunging real GDP and extremely high unemployment.

3. 13.2 How do economists measure the size of the economy?

3.1. Gross Domestic Product is a way that economists can see what a country produces

3.2. Economist calculate GDP to measure how big the economy is

3.3. Economists also use GDP to compare the economies of individual countries. This time they do so to take population size into account

3.4. Gross Domestic Product- the market value of all final goods and services produced within a country during a given period of time

3.5. Per Capita GDP-a nation’s real gross domestic product divided by its population

4. 13.3 What does the unemployment rate tell us about an economy's health?

4.1. BLS reports the total number of people who were unemployed for the previous month.

4.2. unemployment rate = number unemployed/number in labor force x 100

4.3. Everyone who is eligible to be in the labor force but is neither working nor looking for work is classified as not in the labor force doesnt count as unemployed

4.4. Frictional Unemployment- people who are unemployed because they left their job and are seeking another

4.5. Structural unemployment is a type of unemployment that happens when the need for a certain skill declines because of new technology

4.6. https://www.washingtonpost.com/news/wonk/wp/2015/09/04/u-s-to-release-data-on-jobs-growth-in-august/

4.7. This article shows that the economy was projected to be very good this year. Part of it is true because of the amount of jobs available to the people of America and the unemployment rate dropping to way lower then it has been in quite a few years.