1.2. Another cause is an increase in overall demand
1.3. A third cause is increases in the cost of production
1.4. Demand pull inflation: Extra demand by buyers exerts a 'pull' on prices, forcing them up
1.5. Cost-push inflation: The rising prices of land, labour, and capital 'pushes' the overall price higher
2. Do you think the unemployment rate is a good measure of economic health? Why or why not?
2.1. No, I don't believe it's a good measure of economic health
2.2. The rate doesn't take into account the discouraged workers, who have given up on trying to find a job
2.3. It also doesn't take into account the involuntary part time workers
2.4. Involuntary part-time workers: Workers who settle for part-time employment because they're unable to find full-time jobs
2.5. Discouraged workers: Workers who are willing and able to work, but no longer expect to find a job
2.6. The article goes into detail about the flaws of the unemployment rate as a measure of economic health and discusses other, better, measures that should be used instead.
3. A depression causes serious damage to the economy, as long as lasts a long time
4. Which measure would an economist use to compare the GDP of various countries, and why?
4.1. Economists would use Per Capita GDP to compare various countries' GDP
4.2. Economists must take into account the varying population sizes within the various countries
4.3. Gives a more accurate view of the standard of living within the various countries
4.4. GDP: The market value of all final goods and services produced within a country during a given period of time
4.5. Per Capita GDP: A nation's real gross domestic product divided by its population
5. What is the difference between a recession and a depression?
5.1. A depression is a more severe version of a recession
5.2. A recession is part of the business cycle (contraction) whereas a depression is seen more as an anomaly
5.3. Recession: Decline in economic activity for at least six months
5.4. Depression: Prolonged economic downturn, characterized by a rapidly lowering real GDP and extremely high unemployment rates.
