Ap Macroeconomics Chapter 4 Measuring GDP and Economic Growth + quiz review
______ good is an item that is bought by its final user during a specified time period. ______ good is an item that is produced by one firm, bought by another firm, and used as a component of a final good or service.
A final; An intermediate
Imports
goods produced abroad and sold domestically
Exports
goods produced domestically and sold abroad
Real GDP is the value of the _____ goods and services produced in a given year expressed in terms of the prices in _____ year. Nominal GDP is the value of the _____ goods and services produced in a given year expressed in terms of the prices of _____ year.
inal; a base; final; that same
Real GDP per person
real GDP divided by the population
An expansion is a period during which _____.
real GDP increases
investment
spending on capital equipment, inventories, and structures
Exports of goods and services are items that firms in _____ produce and sell to _____.
the United States; any other country
net investment
the amount by which the value of capital increases net investment=gross investment - depreciation
Market Value
the amount for which something can be sold on a given market.
Net Domestic Income
the cost of the factors of production used to produce final goods
Depreciation
the decrease in value of a firm's capital that results from wear and tear and obsolescence
statistical discrepancy
the gap between the two measures of GDP
(GDP) Gross domestic product
the market value of the final goods and services produced within a country in a given time period
Potential GDP
the maximum level of real GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurial ability that would bring rising inflation
Income Approach
measures GDP by summing the incomes that firms pay households for the factors of production they hire
Which of the following countries is facing a recession?
Japan's real GDP of 3.8 percent in the first quarter decreased by 0.3 and 0.4 percent respectively in the second and third quarters of 2012.
Depreciation is the _____ in the value of _____ that results from its use and from obsolescence.
decrease; capital
The business cycle is a _____ but _____ up-and-down movement of total _____ and other measures of economic activity.
periodic; irregular; production
subsidy
A government payment that supports a business or market
During a year, a firm's gross investment is $8,000 and net investment is $6,400. The firm's depreciation is ______.
$1,600
Aggregate income in an economy in 2014 is $995 billion. Saving is $30 billion and imports are $35 billion. Aggregate expenditure in the economy in 2014 is ______.
$995 billion
Indirect tax
(n.) A tax, such as a sales tax or value-addes tax, that is levied (placed) on goods or services rather than individuals and is ultimately paid by consumers in the form of higher prices.
Which of the following is an example of investment?
Continental buying Airbus planes
Which of the following is an example of a final good or service?
Dan bought a Toyota Camry.
Which of the following is an example of an intermediate good or service?
Samsung buys compressors for manufacturing refrigerators.
Which of the following is an example of consumption expenditure?
Rachel buying a TV.
Which of the following is an example of government expenditure on goods and services?
The White House buying internet services.
Net exports of goods and services
The value of exports of goods and services minus the value of imports of goods and services.
expansion
a period during which real GDP increases
Recession
a period during which real gdp decreases its - its growth rate is negative- for at least 2 successive quarters
business cycle
a periodic but irregular up-and-down movement of total production and other measures of economic activity
Purchasing Power Parity
a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries
Sugar purchased by Angelo's bakery to make pies and cakes is an example of ______ good. Shares in Ford Motor Company is an example of ______ good Flour purchased to make pizza is an example of ______ good. Cough medicine purchased by Tracy who has a cold is an example of ______ good.
an intermediate; neither a final nor intermediate an intermediate;a final good
Final good or service
an item that is bought by its final user during a specified time period
Intermediate good or service
an item that is produced by one firm, bought by another firm, and used as a component of a final good or service
gross
before subtracting the depreciation of capital
The total amount spent _____ is called gross investment.
both buying new capital and replacing depreciated capital
Real GDP per person is real GDP _____.
divided by the population
gross private domestic investment
expenditure on capital equipment and buildings by firms and the additions to business inventories
net exports
exports minus imports
This purchase of paper ______ part of GDP because the paper is ______ good. The value of the paper is counted in GDP as ______.
is not; an intermediate part of the value of the textbook
domestic
product is produced within a country
Nominal GDP
the value of final goods and services produced in a given year when valued at the prices of that year
underground economy
the part of a country's economic activity that is unrecorded and untaxed by its government.
compensation of employees
the payment to, and the income received by, labor, including wages, salaries, and in-kind fringe benefits
Choose the option that is an example of government expenditure.
the purchase of telephone service for the house of representatives
gross investment
the total amount spent on purchases of new capital and on replacing depreciated capital
aggregate income
the total income received by all factors of production in a given period
consumption expenditure
the total payment for goods and services
The amount by which _____ is called net investment.
the value of capital increases
Real GDP
the value of final goods and services evaluated at base-year prices
Government expenditure
when governments buy goods and services from firms
The goods and services that we sell to people in other countries are ______. The goods and services that we buy from people in other countries are ______.
exports; imports; called net exports
Net exports of goods and services is the value of _____ of goods and services _____ the value of _____ of goods and services.
exports; minus; imports
Gross domestic product (GDP) is the market value of all the _____ goods and services produced _____ a country in a given time period.
final; within
Imports of goods and services are items that _____ in the United States _____ the rest of the world.
households, firms, and governments; buy from
Potential GDP is the value of real GDP when all the economy's factors of production - _____, _____, _____, and _____ - are fully _____.
labor; capital; land; entrepreneurial ability; employed
