Economics Chapter 13 Notes Name: ____________________ Measuring the Economy How do economists measure a nation’s economic health? Directions: While reading chapter 13, complete the following. You are creating reading notes for yourself. Section 13.2 1. What is GDP and what is included in its measurement? 2. Write an equation to calculate GDP. 3. Complete the following Chart Definition How it’s measured Nominal GDP Real GDP Per Capita GDP 4. What is the literacy rate and how is it usually related to a country’s GDP? 5. What is infant mortality rate and how is it affected by a country’s GDP? Section 13.3 6. What is the unemployment rate? 7. How do you calculate the unemployment rate? 8. Complete the following chart. Type of Unemployment Definition Example 9. Explain the natural rate of unemployment. Section 13.4 10. What is inflation? 11. What is the CPI? 12. How do you calculate the inflation rate using the consumer price index? 13. Complete the following chart. Definition How is it measured Nominal cost of living Real cost of living Nominal wages Real Wages 14. What are the three types of inflation? 15. What are the two main causes of inflation? 16. Draw a simple flowchart to show how the wage-price spiral contributes to the inflation rate. Section 13.5 17. Create a drawing that illustrates how the business cycle works. Represent each phase of the cycle with an illustration, a label, and a definition. 18. Complete the following chart. Characteristics of an expanding economy Characteristics of a contracting economy 19. Why might an economy stop expanding and start contracting? 20. What is the difference between a recession and a depression?