Macro quiz 5

What event was a major influence on the development of macroeconomics

Great Depression

The four types of spending in GDP are personal consumer spending, ___________ private domestic investment, government spending, and ___.

Gross; net exports

A business cycle is:

the periodic fluctuation of economic activity.

The largest component of GDP is

consumption expenditures

We are most likely to see a recession if interest rates on long-term bonds are:

lower than interest rates on short-term bonds.

GDP can be found either by adding up all of the __ or all of the __ in the economy.

spending; income

(Table) According to the table, the GDP for 2010 was:

$14,592.3 billion

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

Circular flow diagram

Simon Kuznets:

Devised the gross national product as a way of measuring a nation's economic output

When Mr. Wilson worked full time, he paid a service to have his house cleaned twice a month. Now that he is retired, Mr. Wilson does his own cleaning. What is the effect on GDP?

GDP falls as a result of this change.

Which of the following describes the informal economy

It is largely unmeasured.

Which organization determines the beginning and end dates of a recession?

National Bureau of Economic Research

Suppose an economy has historically grown at a rate of 1.25%. Economic activity decreased every quarter over the past year, but the decline stopped this quarter. The economy is expected to grow at a rate of 1.4% in the near future, but monetary authorities are concerned that inflation may increase. This economy is probably in the __ stage of the business cycle.

Trough

U.S. business cycles since 1950 have shown:

expansions to be longer than recessions.

The US gross domestic product is equal to the total market value of all

final goods and services produced by resources in the United States.

The value of cars that the Ford Motor Company produces in a German plant:

is a part of U.S. GNP.

Which of the following items would be included in the GDP accounts

paying $50 consultation fee over the phone with a psychic adviser

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

purchases of common stock by investors