Exam 3 Econ Online videos etc

Per capita GDP is calculated by:

dividing production by population.

Which of the following is NOT a component of GDP? a. Investment b. Consumption c. Government Expenditures d. Net Exchange Rates

Net Exchange Rates

Intermediate Goods

Intermediate goods are components of the final product and are not counted separately to avoid double-counting

What is GDP

The market value of all final goods and services produced within the borders of a country during a year

If the Real GDP of Duoland grew by 3 percent last year, and the population of Duoland grew by 1 percent, the standard of living in Duoland:

improved.

If the growth of real GDP is sluggish—that is, below trend—in order to stimulate the economy policymakers may choose to:

increase the money supply.

5. In the United States, the trend growth rate of real GDP is about:

3.0 percent annually.

Nominal GDP is:

the market value of all final goods and services produced within the borders of a country in a year, measured in today's prices

Purchases of goods and services produced in another country are identified as:

imports

Gross Domestic Product (or GDP) is a basic measure of:

national economic output.

What are the components of GDP?

Consumption (C) Investment Spending (I) Government Spending(G) Net Exports (X-M)

New real estate construction and business spending on software and equipment are examples of:

Investment

What is the largest component of GDP in the United States?

Consumption

Market Value

Market value is the price at which a good or service sells in the marketplace

Real GDP is: a. Nominal GDP adjusted for inflation. b. GDP adjusted for changes in output. c. Nominal GDP adjusted for population. d. GDP adjusted for standard of living.

Nominal GDP adjusted for inflation.

Why is the transition towards a more service-based economy a positive economic sign?

This is a sign of growing income.

Per capita GDP:

a. is the GDP of a country divided by that country's population. b. measures the standard of living in a country.

To maintain the current standard of living, an economy must grow:

at least as fast as its population is growing.

The consumption category of GDP is made up of consumer spending on:

both goods and services.

The country of Duoland has a GDP of $400,000 and the country of Unoland has a GDP of $100,000. The standard of living in Duoland:

cannot be determined from the information provided.

A utility company builds a new nuclear reactor that is counted as part of the current year's GDP. The nuclear reactor would be counted as part of:

investment spending.

Nominal GDP:

is calculated by adding up the final sales of current production.

Countries that have large populations, such as China and India: a. tend to have smaller total GDPs. b. always were among the richest nations in the world. c. may have smaller per capita GDPs, even if their total GDP is large. d. may have larger per capita GDPs, because their total GDP is large.

may have smaller per capita GDPs, even if their total GDP is large.

A growing economy is important in order to:

meet citizen's expectations for more goods and services per capita

The net consequence of our economic interactions with the rest of the world can be captured in what measure?

net exports

Automatic stabilizers are

provisions in a government's budget that cause government spending to rise (fall) or taxes to fall (rise) automatically—without legislation—when GDP falls (rises).

The measurement used to capture what is currently being produced in an economy is:

real GDP

Real GDP is:

the market value of all final goods and services produced within the borders of a country in a year adjusted for price changes.

State and local governments contribute more to GDP than the federal government because:

transfer payments are not counted as part of GDP, even though they support other components.

GDP per capita is a better measure of economic welfare than total or aggregate GDP. a. True b. False

true

Real GDP is a measure of output that captures production without the effects of inflation. a. True b. False

true

Changes in GDP from one period to another, such as from month to month, are a good way to measure:

current economic performance.

Intermediate goods, such as tires on a car, are part of what is counted in GDP.

false

Which of the following is an example of an automatic stabilizer?

unemployment insurance