ECON 103 LC5

A U.S. automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GDP of the United States?

$2 million $2 million is added to the GDP of the United States because the products produced in Japan are not counted toward GDP.

The Conference Board Leading Economic Index (LEI) predicts a recession whenever the index

falls for three months in a row. The LEI predicts a recession whenever the index falls for three months in a row (compared to the same months the previous year).

Which of these is a macroeconomic topic?

how quickly unemployment falls after recessions end Macroeconomics studies economic activity that focuses on the entire economy. Recessions and their effect on unemployment fall into this category.

In the business cycle, the point at which an expansion turns into a contraction is known as a

peak. This usually means the economy is operating at its capacity.

A Japanese automaker produces $1 million worth of automobiles in its factory in the United States. How much of that is added into the GDP of the United States?

$1 million GDP is the total market value of all final goods and services produced by resources in the United States in a given year.

Suppose in 2018 the United States had consumption worth $13 trillion, investment worth $5 trillion, and government spending worth $3 trillion, with $2 trillion in exports and $3 trillion imports. What was its GDP per capita, assuming there were 400 million residents?

$50,000 The GDP is calculated as $13 trillion + $5 trillion + $3 trillion + ($2 trillion - $3 trillion) = $20 trillion. To find GDP per capita, divide GDP by population, which is $20 trillion/400 million = $50,000.

Suppose in 2018 the United States had consumption worth $12 trillion, investment worth $3 trillion, and government spending worth $3 trillion, with 0 net exports. What was its GDP per capita, assuming there were 300 million residents? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices$20,000

$60,000 The GDP is calculated as $12 trillion + $3 trillion + $3 trillion + $0 = $18 trillion. To find GDP per capita, divide GDP by population, which is $18 trillion/300 million = $60,000.

A Japanese automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GDP of the United States?

$2 million $2 million is added to the GDP of the United States because the products produced in Japan are not counted toward GDP.

A U.S. automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GNP of the United States?

$3 million GNP reflects the market value of all final goods and services produced by resources supplied by U.S. residents, whether they were produced domestically or abroad.

Based on 2018 data, approximately what percentage of GDP is made up of compensation to employees?

52.8% Employee compensation accounted for 52.8% of GDP in 2018.

Rising prices that slow an economy can lead to all of these EXCEPT

an increase in demand for goods and services. This occurs during periods of strong economic growth in which rising demand pushes prices higher as consumers buy more goods and services.

A Japanese automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GNP of the United States?

none GNP reflects the market value of all final goods and services produced by resources supplied by U.S. residents, whether the goods were produced domestically or abroad.

A Japanese automaker produces $1 million worth of automobiles in its factory in the United States. How much of that is added to the GNP of the United States?

none GNP reflects the market value of all final goods and services produced by resources supplied by U.S. residents, whether they were produced domestically or abroad.

A U.S. automaker produces $1 million worth of automobiles in Japan. How much of that is added into the GDP of the United States?

none Nothing is added to the GDP of the United States because the products were produced in Japan, and GDP counts only what was produced in the United States, in this case, the domestic country.

In the circular flow model, businesses receive income from the _____ market and send payment for factors of production to the _____ market.

product; resource Businesses receive income through the product market and send payment to the resource market, where businesses receive inputs for production.

The headline "Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis" appeared in the Wall Street Journal on September 30, 2008. What phase of the business cycle does this headline suggest the economy was in at that time?

recession Downturns, or recessions, can happen because an economic boom has run out of steam, after which business investments begin to decline. Once a recession is under way, businesses react by curtailing hiring and perhaps even laying off workers, thus adding to the recession's depth.

What phase of the business cycle does the headline "Consumer Confidence Continues Upward Trend for a Third Year Consecutive Year" suggest?

recovery This means prior to this period, consumer confidence was lower. When consumers continue to gain more confidence, an economy is in a recovery phase. A recovery begins after an economy has reached the trough of a recession, as businesses and consumers become more enthusiastic about the economy.