AP Macroeconomics : Economic Measurements Quiz

Quiz
*Theme/Title: Economic Measurements
* Description/Instructions
One measure of the health of an economy is Gross Domestic Product, GDP. GDP measures the final dollar value of goods produced within the borders of a country during the current year. GDP shows how much is produced using the available factors of production. Another measure of the health of the economy is a measure of prices. The CPI measures the change in prices using a fixed market basket and the GDP deflator compares the change in prices to the change in output. The formula for the GDP deflator is Nominal GDP / Real GDP. The labor force participation rate is the proportion of the total noninstitutionalized civilian population 16 years of age and over that is in the civilian labor force. The labor force participation rate is essentially the ratio of the civilian labor force to the total noninstitutionalized civilian population 16 years of age and over. Some workers are "discouraged" workers. People who are willing and able to engage in productive activities, but due to their overwhelming lack of success have stopped seeking employment. Discouraged workers believe that any effort to find a job will be fruitless. Discouraged workers fall within the broader category of marginally-attached workers, people who are willing and able to work, who have either held a job or searched for employment within the last year, but are not actively seeking employment. People are marginally attached to the labor force for a variety of reasons, discouraged workers achieve their designation because they believe search efforts would not be worthwhile.

GDP is measured in "NOMINAL GDP" or the total market value, measured in current prices, of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. The key is that nominal gross domestic product is measured in current, or actual prices; the prices buyers actually pay for goods and services purchased. Nominal gross domestic product is also termed current gross domestic product. GDP can be measured in REAL terms. The READ GDP is total market value, measured in constant prices, of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. The key is that real gross domestic product is measured in constant prices, the prices for a specific base year. Real gross domestic product, also termed constant gross domestic product, adjusts gross domestic product for inflation. You might want to compare real gross domestic product with the related term nominal GDP. Both measurements do not include intermediate goods since those goods would be counted twice.

Group: AP Macroeconomics AP Macroeconomics Quizzes
Topic: AP Macroeconomics



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