econ hw 4
The U.S. GDP per capita in 2013 was approximately __________.
$50,000
Real GDP _________.
D. Doesn't include a measure of leisure time or environmental quality
In 2011, Ozzie purchased a 2008 Ford Escort from his neighbor for his son, purchased a 2007 "one owner" Camry from Larchmont Toyota for his wife, bought a 2011 new Ford for himself, and sold his 2000 Dodge Caravan to his teenage nephew. Which, if any, of these transactions will be included in GDP in 2011?
D. Only purchase of the Ford
Choose the option that is an example of government expenditure. A. The payment of subsidies to farmers B. The income paid to Washington correspondents from major networks & newspapers C. The payment of unemployment benefits D. The purchase of airline tickets by Congress to send members to visit overseas troops
D. The purchase of airline tickets by Congress to send members to visit overseas troops
Potential GDP is
D. achieved when all factors of production are fully employed
Which of the following is a final good? A. share of IBM stock B. memory chips in new smart phone C. flour used by bakery to bake cookies D. flour purchased at store to bake cookies
D. flour purchased at store to bake cookies
Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?
Real GDP
Gross domestic product (GDP) is best defined as the __________.
market value of the final goods and services produced within a country in a given time period
If Americans still worked sixty hour weeks, as they did in 1890, __________.
the GDP would be much higher than it is but the well-being of the typical person would not necessarily be higher
The cycle of short-term ups and downs in the economy is called:
the business cycle
The point where economic activity bottoms out in a full business cycle is known as:
the trough
Real GDP is __________.
the value of final goods and services produced in a given year when valued at the prices of a reference base year
Nominal GDP is ______. Real GDP is ______.
B. A more precise name for GDP; the value of final goods and services produced in a given year when valued at the prices of a reference base year
______ is an example of U.S. consumption expenditure.
B. Your purchase of a flight on American Airlines
The use of purchasing power parity prices
B. accounts for differences in the prices of the same goods in different countries when measuring real GDP
A typical business cycle can be described by the sequence ______.
B. expansion, peak, recession, trough
U.S. gross domestic product is the market value of all the ______ produced ______ in a given time period.
B. final goods & services; within the United States
All of the following are examples of investment except ______. A. firm adding unsold output to inventory B. person investing $250 a month in stock market C. purchase of a new assembly line by Ford D. purchase of a new espresso machine by Starbucks
B. person investing $250 a month in stock market
How does the Bureau of Economic Analysis of the U.S. Department of Commerce measure GDP?
By adding the value in dollar terms of all the final goods and services produced domestically.
If Nike, an American corporation, produces sneakers in Thailand this would
C. Add to Thailand's GDP but not to US GDP
Gravel purchased by a firm that produces cement is an example of ________ good. Shares in Ford Motor Company is an example of _______ good. Lumber purchased by the Table & Chair Manufacturing Company is an example of __________ good.
C. An intermediate; neither a final nor an intermediate D. A final; an intermediate
An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is true? I. U.S. net exports decrease. II. U.S. investment increases.
C. Both I and II
Which of the following is TRUE regarding real GDP? I. Real GDP is the value of the total production of the country's farms, factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced.
C. I and III
If we compare the four sources of spending in the economy we see that
C. household consumption is the largest
The relationship between real GDP and potential GDP is that
C. real GDP fluctuates about potential GDP
Which is the largest component of GDP?
Consumption
In measuring changes in the standard of living of a country, economists rely heavily on comparisons over time of real GDP per capita because:
despite its well-known flaws, it is the best means we have of comparing the performance of an economy over time
As the value of a country's real GDP increases, the country is likely to:
devote more resources to pollution reduction
Which of these is not a shortcoming of GDP as a measure of standard of living?
It only counts final goods and services and not intermediate goods.
Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics?
A new house
The expenditure approach to measuring GDP sums together ______, and the largest component is ______.
A. consumption expenditure, investment, government expenditure on goods and services, and net exports; consumption expenditure
______ 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; intermediate
The factor market can best be described as where
A. firms buy the services of labor,land, and capital
In the United States, GDP is typically measured
A. quarterly
Which of the following are not counted as final goods and used in the GDP calculation?
Intermediate goods
Which of the following is included in the economist's definition of investment?
The purchase of new machines, factories, or houses
