Economic Indicators, Unemployment,

Poverty, & Inflation

What is the difference between real and nominal GDP?

Nominal GDP is measured in the year in which the

GDP was calculated. Real GDP adjusts for changes

in prices from year to year.

What are examples of nonmarket activities?

How have you participated in the underground economy in your life?

Explain how the following could lead to economic growth.Opening a protected wilderness area to

coal mining.

increase natural resources

Increasing scholarship funding for low-income students.

improve human resources

More Economic Growth

Providing tax breaks for companies purchasing new equipment.

increase capital resources

Strengthening laws to protect the rights of investors.

incentive for creating new technology

What does it take to be unemployed?At least 16 years old.

Able to work.

Have actively looked for work in the last four weeks.

What potential problems do you see with the way that unemployment is calculated?

Describe the difference between underemployed and

unemployed.

Does full employment mean that everyone has

a job?

Unemployment Types:

Because of reduced demand, an appliance company temporarily

closes one of its factories and lays off workers.

cyclical

In September, a part-time student at the University of Central

Florida in Orlando loses his job at a theme park.

seasonal

A local travel agency has to close down because of

the widespread availability of direct

online booking options.

structural

A newspaper journalist leaves her job to make a

switch into television journalism. She has been looking for a new job for

several months.

frictional

What are some examples of welfare programs?

Food stamps

Medicaid

Social Security

Earned-income tax credit

Unemployment insurance

What’s the difference between the poverty

threshold and the poverty rate? What’s another

common term for poverty threshold?

What does a Lorenz Curve show?

Look at page 391 in your textbook.

Explain the Consumer Price Index (CPI)

Measure of changes in the prices of goods and services commonly purchased by consumers.

How is the producer price index (PPI) different than the consumer?

Describe two causes of inflation.

Demand-pull inflation

Cost-push inflation

Who is most likely to be negatively impacted by

inflation and why?