EXAM 2 WCC ECON 61 Questions with Verified Answers,100% CORRECT
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Course
WCC ECON
Institution
WCC ECON
EXAM 2 WCC ECON 61 Questions with Verified Answers
Inflation - CORRECT ANSWER a general increase in prices and fall in the purchasing value of money
- measure of changes in cost of living
what causes inflation? - CORRECT ANSWER 1. Demand-pull inflation
2. Cost-push inflation
3. gov actions...
EXAM 2 WCC ECON 61 Questions with Verified Answers
Inflation - CORRECT ANSWER a general increase in prices and fall in the
purchasing value of money
- measure of changes in cost of living
what causes inflation? - CORRECT ANSWER 1. Demand-pull inflation
2. Cost-push inflation
3. gov actions like printing money
rate of inflation - CORRECT ANSWER percentage increase in prices over a 12-
month period
disinflation - CORRECT ANSWER reduction in the rate of inflation
- still experiencing inflation but at a declining rate
deflation - CORRECT ANSWER decline in overall prices throughout the economy
consumer price index (CPI) -- definition + formula - CORRECT ANSWER index that
measures inflation by measuring the prices of goods purchased by a typical
consumer
finding % change in price - CORRECT ANSWER (CPI in current year / CPI in original
year) * 100 - 100
producer price index (PPI) - CORRECT ANSWER index of the average prices
received by domestic producers for their output
GDP deflator (definition and formula) - CORRECT ANSWER index of the average
prices for all g/s in the economy
- measure of price level
- broadest measure of inflation in NIPA
nominal value - CORRECT ANSWER current dollar value
, real value (definition and formula) - CORRECT ANSWER constant dollar value
real = nominal * (base year index / current year index)
hyperinflation - CORRECT ANSWER extremely high rate of inflation
- above 100% per year
- usually caused by an excess of gov spending
- often leads to collapse of the financial system
- citizens sometimes resort to bartering
- political independence of the central bank key to prevent hyperinflation
unemployement rate - CORRECT ANSWER number of unemployed / labor force
underemployed workers - CORRECT ANSWER workers who are forced to take jobs
that do not fully utilize their education, background, or skills
- often hold part-time jobs
marginally attached workers - CORRECT ANSWER Workers who were available for
work and actively looked for it during the last 12 months, but not in the last 4
weeks
discouraged workers - CORRECT ANSWER people who are available for work but
have not looked for a job during the previous four weeks because they believe no
jobs are available for them
- not part of the labor force
types of unemployment - CORRECT ANSWER 1. Frictional Unemployment: short
term duration of unemployement caused by workers switching jobs (often
voluntarily)
2. Structural Unemployment: caused by changes in the structure of consumer
demands or technology
- demand for some products declines and the skills of the industry's workers
become obsolete
- tends to be longer term and involuntary
3. Cyclical Unemployment: because of the business cycle
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