# BEC 5 - Econ Measures

 What is the formula for the expenditure approach to determining the GDP? G-I-C-E+ Goverment spending+ Investment+ Consumption+ Exports (net) What is the formula for determining the unemployment rate (Number of unemployed / total labor force) * 100, where total labor force includes the employed+unemployed What is frictional unemployment? The time spent between jobs looking for a new job. What is structural unemployment? People who can't find a job either because they do not have the skills, or do not live where the jobs are located. What is cyclical unemployment? When is this (+) vs (-)? Changes due to expansion or contraction of the economy (chg in real GDP). It's (+) when employment is below full employment, and (-) when above full employment. What is full employment? What isn't full employment? Full employment is when there is no cyclical unemployment and the economy is operating on the production possibility curve. It doesn't mean there's no unemployment b/c some people still quit voluntarily to find another job, or structural unemployment exists. What is the formula for calculating CPI? (Current cost of market basket / base yr cost of the same market basket) * 100 What is the formula for the inflation rate? (CPI this period-CPI last period / CPI of the last period) * 100 What are the 3 methods used by the government to expand monetary policy and what is the effect? Effect: increases AD, increases GDP, increases prices (some inflation), decreases unemployment* Using open market operations to repurchase treasury bonds* decrease the discount rate to decrease the overall interest rate* decrease the required reserve ratio What are the 3 methods used by the government to contract monetary policy and what is the effect? Effect: reduce AD, GDP decreases, decrease prices (reduce inflation), increase unemployment* use open market operations to sell treasury bonds* increase the discount rate* increase the reserve ratio Which will likely cause a increase in the amount of frictional unemployment and why? (1) an increase in the avg age of the workforce, or (2) a decrease in the avg age of the workforce (2) a decrease as younger people tend to change jobs more frequently A lender borrowed money at 3% interest for 1 yr and paid \$1,030 at the end of the year. There was 2% inflation. What is the amount worth in real terms? \$1009.80\$1,030 / 1.02 AuthorBethM ID330631 Card SetBEC 5 - Econ Measures DescriptionBecker Review Updated2017-05-19T21:34:01Z Show Answers