Macro Chapter 6

If personal consumption is $100, investment is $25, government purchases total $25, imports equal $20, and exports equal $10, then GDP equals:

140

A sheep ranch produces $30 worth of wool. A suit manufacturer produces $60 worth of suits. A retail outlet sells a suit to a customer for $180. The change in GDP would be:

180

According to the circular flow model, the value of the household sector and the value of the business sector will:

always be equal

The idea that all income ultimately goes to households, which then use it to buy goods and services from firms, is a central idea of the:

circular flow diagram.

The largest component of GDP is:

consumption expenditure.

Which of the following will NOT be included in the GDP?

cruise ship registered in norway

Which component of GDP includes inventory changes?

inventory

One important reason economists track business investment is that:

it is a leading indicator of the business cycle

According to the table, what is the value of this country's net exports?

not 115

According to the table, net domestic product is:

not 1770 billion

Suppose a loaf of bread goes through the following stages of production, with the values noted at the end of each stage:

not 6.3

At the peak of the business cycle, the economy is typically operating:

not above capacity

Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, then:

not exports exceed imports by $150 billion

Which of the following items is NOT included in gross private domestic investment?

not increases in business inventories

In the national income accounts, which of the following is NOT classified as government spending?

not services provided by police oficers

A business cycle is:

the periodic fluctuationof economic activity

At one time, Pittsburgh, Pennsylvania, was known for its poor air quality. Locals said that a man wearing a white shirt when he walked into the city would have a black shirt when he left it. Since that time, the city has greatly reduced its air and water pollution. As a result of cleaner air and water:

the standard of living of the citizens of Pittsburgh increased, even though the improvement in the environment was not reflected in its GDP

According to the table, when using the expenditure approach, GDP is:

not 1320 bill

According to the table, with the income approach, national income is:

not 1330 billion

According to the table, GDP for 2010 was:

not 16843.8

The simple circular flow diagram shows that economic aggregates can be calculated either by the _____________ flows in the product market or by the ______________ flowing to households in the resource market.

not spending; output

Ethiopia has a GDP of $8 billion (measured in U.S. dollars) and a population of 55 million. Costa Rica has a GDP of $9 billion (measured in U.S. dollars) and a population of 4 million. Calculate per capita GDP for each country

Ethiopia = $145.00 Costa Rica = $2250.00

If in the past you have always painted your own house but now you hire a painting contractor to do the work, what is the effect on GDP?

GDP rises as a result of this change.

Which ONE of the following transactions would be included in the national income and product accounts?

Jaslyn is paid for her work as the volunteer coordinator for a women's shelter.

The study of macroeconomics as a specific discipline is due primarily to:

John Maynard Keynes.

In a simple circular flow diagram, total spending on goods and services in the product market:

equals the total income earned in the resource

An economic recovery that produces too few jobs to significantly reduce the unemployment rate is known as a(n):

jobless recovery