Chapter 5 Modules
When a significant fraction of the domestic production takes place in foreign-owned facilities, a country's difference between GDP and GNP is as follows:
GDP will be much larger than GNP
The flow of funds from __________ into the financial system makes it possible for government and firms to borrow.
households
Which of the following are not counted as final goods and used in the GDP calculation?
intermediate goods
Which of these covers the study of topics such as inflation and unemployment?
macroeconomics
Disposable personal income is equal to personal income minus:
personal tax payments
Which of these terms are the "flip" sides of macroeconomic activity?
production and income
The total national income actually received by a country's residents is:
smaller than the value of GDP
Real GDP is:
the value of good and service evaluated at base year prices
Macroeconomics focuses on which of the following topics?
unemployment, inflation, growth, and trade
A trade surplus occurs when:
exports are greater than imports
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
In the circular flow model, who supplies factors of production in exchange for income?
Households
Which of these is not a shortcoming of GDP as a measure of welfare?
It only counts final goods and services and not intermediate goods
Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?
Real GDP
To calculate personal income from national income, which of the following must be done by the BEA?
add government transfer payments
According to the graph, at what point does the economy begin a period of recession?
after the peak
Which letter best represents the demand for factors of production in this circular flow model?
c : firm to factor market
Which is the largest component of GDP?
consumption
Which phase of the business cycle is characterized by increasing levels of unemployment?
recessions
The cycle of short-term ups and downs in the economy is called:
the business cycle
Gross domestic product is best defined as the:
the market value of all final goods and services produced in a country during a period of time
Which of the following is included in the economist's definition of investment?
the purchase of new machines, factories, or house
The point where economic activity bottoms out in a full business cycle is known as:
the trough
The GDP is a measure of the:
total dollar value of all goods and services produced within the borders of a country