AP Macroeconomics Unit 2, AP Macroeconomics Unit 1 Questions And Answers
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AP Macroeconomics
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AP Macroeconomics
AP Macroeconomics Unit 2, AP
Macroeconomics Unit 1 Questions And
Answers
Real GDP GDP expressed in constant or unchanging dollars -- adjusts for inflation
Best measure of economic growth
The Business Cycle Alternating periods of economic expansion and economic recession
Three Major Economic...
, AP Macroeconomics Unit 2, AP
Macroeconomics Unit 1 Questions And
Answers
Four components of GDP 1. Consumer Spending
2. Investment (business spending on tools/equipment
3. Government spending (NOT transfer payments)
4. Net exports -- exports (x) - Imports (M)
GDP = ? C + I + G + Xn
Income approach adds up 1. Labor income
2. Rental income
3. Interest income
4. Profit
Factor payments
Unemployment Workers that are actively looking for a job but currently aren't working
Frictional Unemployment Temporary unemployment or being between jobs
, AP Macroeconomics Unit 2, AP
Macroeconomics Unit 1 Questions And
Answers
Individuals are qualified workers with transferable skills
Structural Unemployment Changes in labor force make some skills obsolete
Workers DO NOT have transferable skills and these jobs won't come back
Permanent loss of jobs = creative destruction
Workers must learn new skills
Cyclical Unemployment Unemployment caused by a recession
As demand for goods/services falls, demand for labor falls and workers are fired
"Demand deficient unemployment"
How do you calculate the unemployment rate? Percent of people unemployed
(# unemployed)/(# in labor force) x 100
Who is in the labor force? -Above 16 years
-Able/willing to work
-Not institutionalized (jail/hospital)
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