Principles of Macroeconomic Indicators Quiz

GDP measures the total value of goods and services produced within a country's borders, excluding household savings.

CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Expansionary fiscal policy aims to increase aggregate demand and stimulate economic growth during periods of recession or stagnation.

A trade deficit occurs when a country imports more goods and services than it exports, leading to a negative balance of trade.

Aggregate demand consists of consumption, investment, government spending, and net exports, but imports are not considered a component of aggregate demand.

GDP is the sum of consumption, government spending, investment, and net exports.

Unemployment rate = (Number of unemployed / Labor force) * 100% = (5 million / (5 million / 0.8)) * 100% = 6.25%

Stagflation is a situation where there is stagnant economic growth, high unemployment, and high inflation.

Fiscal policy involves government spending and taxation, while monetary policy is controlled by central banks.

Unemployment rate is the ratio of the number of unemployed individuals divided by the total labor force, expressed as a percentage.

The Phillips Curve shows the trade-off between unemployment and inflation rates.

The Gini coefficient is a measure of statistical dispersion intended to represent the income inequality within a nation or any other group of people.

M1 includes currency in circulation, demand deposits, traveler's checks, and other checkable deposits.

Open market operations involve the buying and selling of government securities to control the money supply and interest rates.

Structural unemployment occurs when there is a long-term mismatch between the skills workers possess and the skills required for available jobs.