Chapter 13 Measuring the Economy

1. 13.3 What Does the Unemployment Rate Tell Us About an Economy's Health?

1.1. The Bureau of Labor Statistics collects and analyzes data using Unemployment rates. A high unemployment rate basically means the economies health is poor.

1.2. You know the economy is healthy when there is very little unemployment involved.

1.3. A healthy economy always has frictional, seasonal, and structural unemployment but has little cyclical unemployment. Cyclical Unemployment is occurs during periods of decline.

1.4. When labor sources aren't being fully utilized, less economic output becomes the result.

2. 13.4 What Does the Inflation Rate Reveal About an Economy’s Health?

2.1. The inflation rate reveals Americans costs of living in households like buying goods and services for your house.

2.2. Because prices for everyday goods and services change so dramatically, and happen all the time, it shows that are economy's health is poor. Price changes is one of the main things our economy was suppose to work on changing.

2.3. The Real Cost of Living helps adjust inflation because it allows economists to calculate the real cost of things in constant dollars

2.4. Standards of living declines as the prices change across goods and services.

3. 13.5 How Does the Business Cycle Relate to Economic Health?

3.1. Business Cycles relate because they are the ups and downs in economic activity in expansion or recession.

3.2. Business cycles imply that expansions and contractions at regular intervals.

3.3. Expansion during the business cycle shows that economic activity occurs regularly, and increases from month to month.

3.4. The business cycle basically helps keep track of the expansions, peaks, contractions, and the trough, and this helps the economy out a lot by keeping track of the economies growth and when it decreases.

4. 13.2 How do economists measure the size of an economy?

4.1. A main way to measure the economy is by using GDP, which indicates a country's total economic output.

4.2. The Bureau of Economic Analysis calculates GDP every three-month period. Economist will use a calendar year to compare productions from year to year.

4.3. Another way Economist measure the economy is by calculating goods and services. They end up dividing the country into four sections; households, businesses, government, and foreign trade. They then calculate using this formula: C + I + G + NX = GDP

4.4. An easy way to measure/calculate a countries population is by using Per Capita GDP (a nation's real gross domestic product divided by it's population) which will help compare one nation to another.