| A | B |
|---|
| An example of a durable good would be | A used acr |
| the most severe economic downturn in the history of the U.S. | The Great Depression |
| An example of a nondurable good is | a paperback book |
| GDP expressed in constant, or unchanging, prices | real GDP |
| The amount of money a person has left of his or her income after taxes | Disposable personal income |
| The lowest point in an economic contraction | A trough |
| How is nominal GDP converted into real GDP? | through eliminating the effects of price increases (inflation) on GDP growth |
| an example of a final good or service | A cake purchased from a bakery for a wedding |
| Shows when the price level falls, consumers and firms buy more goods and services. | aggregate demand curve. |
| an example of depreciation | A construction worker’s truck breaks down more often after 80,000 miles of normal wear and tear. |
| What economic index is used to measure inflation? | CPI |
| When the economy is healthy or has full employment, what is the unemployment rate | 4-6% |
| The “market basket” that is used by the Bureau of Labor Statistics to calculate CPI is made up of | typical goods and services for an urban household |
| How has the distribution of income in the United States changed over the last 20 years? | It has become less equal. |
| What does it mean when a person is underemployed? | The person has a job but they are overqualified for it. |
| According to the demand-pull theory, what is responsible for inflation? | Supply for goods and services exceeds existing demand. |
| cost-push theory | Producers raise prices to meet increased costs. |
| the largest portion of the GDP formula, making up 2/3 of the total dollar amount of GDP | Gross Business Investment |
| What nation has the largest GDP? | China |
| What nation has the fastest growing GDP? | Japan |
