Chapter 13 Measuring The Economy

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

1.1. Gross Domestic Product is the market value of all final goods and services produced within a country.

1.2. They calculate it by measuring expenditures on goods and services produced in a country.

1.3. They use GDP to determine how big an economy is and if it is growing or shrinking.

1.4. Market Value is the price buyers are willing to pay for a good or service

1.5. A final good is any new good that is ready for use by a consumer.

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

2.1. It is hard to get an accurate number because of the underground economy.

2.2. http://www.mcall.com/business/mc-lehigh-valley-unemployment-october-rate-20151203-story.html

2.3. The unemployment rate in the Lehigh Valley dropped to 5.1 percent. This is partially due to school being out and construction season starting up. The unemployment rate is as low as it was during the recession back in 2008.

2.4. Structural unemployment comes from when technology takes place of a job.

2.5. Seasonal unemployment occurs when businesses shut down or slow down for part of the year.

2.6. The BLS reports the total number of people who were unemployed for the previous months.

3. 13.5How does the business cycle relate to economic health?

3.1. A period of economic growth is known as an expansion.

3.2. The point at which an expansion ends marks the peak of the business cycle.

3.3. Predicts Intervals

3.4. Periods of Boom and Bust

3.5. The lowest point of a contraction is known as a trough

4. 13.4 What does the inflation rate reveal about an economy's health?

4.1. Percentage increase in the average price level of goods and services.

4.2. The BLS tracks what american's buy.

4.3. The nominal cost of living is the cost in current dollars of all the basic goods and services.

4.4. In the US the inflation rate has been about 3.2% since 1913.

4.5. Deflation occurs when prices go down over time.