Chapter 13 Measuring The Economy

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Chapter 13 Measuring The Economy by Mind Map: Chapter 13 Measuring The Economy

1. 13.3 What does unemployment rate say about a economy?

1.1. KEY POINT 1) Like GDP, Unemployment rate plays a crucial role in measuring an economy. If the rate is high the economy is probably not well. if the rate is low the economy is probably well.

1.2. KEY POINT 2) Members of the of the labor force but is neither working nor looking for work who is classified as unemployement

1.3. KEY POINT 3) there is a difference between not being in the labor force and being unemployed.

1.4. KEY POINT 4) There are four types of unemployment: Frictional, Structural, Seasonal, Cyclical.

1.5. Unemployment Rate- the percentage of the work force that is currently unemployed but is actively searching for work

2. 13.4 what does inflation rate reveal about the economy's health?

2.1. KEY POINT 1) The BLS track inflation rate by recording information of America's cost of living

2.2. KEY POINT 2) They also record change in inflation using consumer price index

2.3. KEY POINT 3) occasonally inflation goes into overdrive, the result is hyperinflation

2.4. KEY POINT 4) the CPI is slow to reflect to changing trends in shopping patterns

2.5. Inflation Rate- the percentage increase in the average price level of goods or services from one month or year to the next

2.6. Price Index- a measure of the average change in price of a type of good over time

2.7. Deflation- a fall in price of goods or services, the opposite of inflation

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

3.1. Business cycle

3.2. KEY POINT 1) the business cycle consists of four phases: expansion, peak, contraction, through

3.3. KEY POINT 2) business cycles are know as boom or bust. because it either goes well (boom) or it goes really bad (bust)

3.4. KEY POINT 3) a recession can last a long time and damage the economy

3.5. KEY POINT 4) The business cycle consistently rise and fall and when it rises it eventually falls and when it falls it eventually rises

3.6. Business Cycle- a recuring patern of growth and decline in economic activity over time

3.7. Expansion- period of economic growth

3.8. Peak- the highest point in a expansion

3.9. Contraction- period of economic decline

3.10. Through- lowest point in a contraction

4. 13.2 How do economist measure the size of the economy?

4.1. KEY POINT 1) When trying to measure an economy an economist can look at 2 perspectives Microeconomics or Macroeconomics.

4.2. KEY POINT 2) The most used form of measurement for most nations is GDP (Gross Domestic Product)

4.3. KEY POINT 3) Economist use GDP figures to not only determine how big an economy is, but also to figure out if the economy is growing or shrinking and at what rate.

4.4. KEY POINT 4) GDP is a good measurement of an economy but it has its limitations

4.5. Gross Domestic Product- the market value of all final goods and services produced in a country within a certain time period.

4.6. Market Value- the price a buyer is willing to pay for a product or service in a competitive market