Chapter 2 Review Economic Activity

People who buy bonds are called?

Only final goods are counted when GDP is measured.

An increase in the general level of prices

An increase in GDP per capita means that

Which of the following would NOT be included in a measure of GDP?

The labor force consists of all people above age __ who are actively working or seeking work.

The interest rate financial institutions are charged to borrow from Federal Reserve banks

___ refers to money spent by a business for an item that will be used over a long period

Period marked by a long period of high unemployment, weak sales, and business failures

When you buy a corporate bond, you have lent money to the company.

A decrease in the general level of prices

Inflation

The portion of people in the labor force who are not working

Represents debts for an organization

A(n) ____ is a number that compares prices in one year with some earlier base year.

The money for capital projects usually comes from

Inflation can sometimes occur when the demand for goods and services is greater than the supply

The last depression in the United States occured during the 1980's.

The production output in relation to a unit of input.

If wages increase faster than gains, the cost of producing goods decrease and prices fall.

Some nations have such abundant resources that they never experience bad times.

The total amount owed by the federal government is called the

Salaries and wages as well as investment income and government payments to individuals

People with poor credit ratings pay a higher interest rate to borrow money.

A period when demand begins to decrease, unemployment begins to rise, GDP slows for 2 quarters

Which type of business sells stock?

The total dollar value of all final goods and services produced in a country during one year

Period in the business cycle when most people who want work are working, wages are good.

Represents ownership in a corporation

The main cause of unemployment is reduced demand for the goods and services being provided.

Capital projects involve spending by businesses for employee training and benefits.

A period of economic recovery

A well-run business should never need to borrow money.

The sales of durable and nondurable goods bought by consumers

The movement of the economy from one condition to another and back again is called the