Macro Econ Chapter 9

Consider the following graphs, which are discussed in the textbook. Focus on the graph that looks at the relationship between GDP per person and infant deaths per 1,000 live births. What can explain this relationship?

As real GDP per person rises, maternal and fetal health increase due to better health care, education, sanitation, and nutrition.

Consider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year?

5%

what is consumption

consumption is a component of total spending along with investment, government spending, and net exports

What does GDP not account for?

prices are not values, non-market activities, the shadow economy, environmental degradation, leisure, and the distribution of income

What is nominal GDP?

the production of goods and services valued at current prices

what are transfer payments?

the transfer of payment from one entity to another without the need for labor or physical products in return

does the reselling market affect GDP?

no, GDP is affected by the selling and purchasing of goods directly out of production

Consider the data shown in the table. Assume that the economy produces only barrels of oil. What is the real GDP for this year using last year as the base year?

$4,980,000

Consider the data shown in the table. Assume that the economy produces only frozen fish. What is the real GDP for last year using this year as the base year?

$185,000

In 2017, the total population of Africa was estimated to be about 1,250,000,000 people. This number, in billions, is:

1.25

what are investments?

the spending on productive physical capital

Dale is a stay-at-home-parent whose typical day consists of getting the kids ready for school, doing the laundry, cooking three meals, and cleaning the house. How are Dale's home activities counted in GDP?

they are not counted

Below is U.S. economic data for 2018. What was total spending?

$20.58 trillion

which of the following are included in investment? (i) military spending(ii) the purchase of an aircraft by a domestic airline(iii) the purchase of $45,000 worth of bonds(iv) the purchase of $32,000 worth of stock(v) social security payments(vi) the construction of a highway by the federal government

ii

what is the difference between microeconomics and macroeconomics?

microeconomics is the study of individual decisions in specific markets, whereas macroeconomics is the study of the economy as a whole

how do you calculate net exports?

subtract imports from exports

which of the following is an example of transfer payments? government loans, military salaries, unemployment benefits, interest earned on savings in a bank

unemployment benefits

which of the following is an example of a durable good? a soft drink, your new car, your haircut, fresh flowers from the florist

your new car

Consider the data shown in the table. Assume that the economy produces only textbooks. What is the nominal GDP for last year?

$250,000

how do you calculate total spending?

add consumption, investment, government spending, and net exports

you purchased a new car for $38,000. after 6 months you sell the car for $31,500. How much does GDP rise because of these two actions.

GDP rises by 38,000

what is the difference between spending from a microeconomic standpoint versus spending from a macroeconomic standpoint?

In microeconomics, spending refers to spending by you, or your family, or your company, whereas in macroeconomics, spending refers to the spending by all consumers, all businesses, and the government in the economy

how to calculate growth rate?

divide the difference between the ending and starting values for the period being analyzed and dividing that by the starting value OR keeping all things constant, divide the difference between outputs with the starting output.

Which of the following is a scaled number? total tax revenues in the economy the sum of all incomes earned in the economy the country's national debt government budget deficit as a percentage of GDP

government budget deficit as a percentage of GDP

refer to the circular flow of income. The key lessons from this diagram are that:(i) all flows of resources are matched by flows of money.(ii) the market value of total output must be equal to total spending.(iii) total spending must equal total income.(iv) all inputs are provided by businesses.

i, ii, and iii

what is a scaled number?

a number condensed so that it is easier to understand