ECON 201 Chapter 5-6

Using the expenditure approach, GDP equals:

C + I + G + (X − M).

In Exhibit 16-1, the recession phase of the business cycle can be represented by points:

CDE

Which of the following is a shortcoming of GDP?

GDP excludes nonmarket transactions.

Which of the following market transactions of final goods and services are excluded from the computation of U.S. GDP?

Secondhand transactions, such as used car sales.

Structural unemployment is unemployment caused by:

a mismatch between worker skills and employer requirements.

Full employment means which of the following is zero?

cyclical unemployment

National income (NI) is calculated by adjusting GDP for:

depreciation

GDP is a measure of:

domestic production

How do we measure economic growth?

increases in real GDP

Personal income is:

the amount households have available for consumption, savings, and payment of personal taxes.

Economists usually use the term "recession" to refer to:

two or more consecutive quarters of declining real GDP.

Real GDP means GDP:

valued in the prices of the base year

In Exhibit 15-8, and using the expenditures approach, gross domestic product (GDP) equals:

$1,420 billion.

Suppose in a given year, U.S. nominal GDP was $5,744 billion and the GDP chain price index for that year is 93.6. Real GDP is approximately:

$6,137 billion.

Your purchase of a Gucci bag made in Italy would be classified as:

an import

Intermediate goods are goods and services used:

as inputs

Based on the circular flow model, money flows from households to businesses in:

product markets

Economists use the phrase "business cycle" when referring to fluctuations in:

real GDP

The period of declining growth in real GDP between the peak of the business cycle and the trough is called a(n):

recessionary phase.

Which of the following is associated with peaks in the business cycle?

relatively low levels of unemployment