Macro Exam
Scarcity refers to the situation in which
unlimited wants exceed limited resources
Real GDP is GDP in a given year
valued in the price of the base year
Define GDP-
Gross Domestic Product- market value of all final goods+ services produced in a country for a given period of time, usually a year
Gross domestic product understates that the total production of final goods and services because of the omission of?
household products
The size of the underground economy would tend to increase if the government of a country
increased income tax
The purchase of a new house is included in the
investment expenditures
in an underground economy the production of goods and services
is not measured or included in GDP
In 2014, which component of GDP had a negative value?
net exports
Define economic models-
simplified versions of reality used to analyze real world economic situation
Define economics-
the study of how individuals, households+ governments make choices.
Suppose in 2016 you purchase a home built in 2003. Which of the following would be included in the gross domestic product for 2016?
the value of the services of the real estate agent
Define scarcity-
unlimited wants but limited resources- this is the economic problem
Differentiate macroeconomics from microeconomics
- macro the whole economy micro- individuals+ house hold firms
If nominal GDP exceeds real GDP for a specific year, the GDP deflator must be
greater than 100
legalizing all forms of illegal activities
increases GDP and reduces the size of the underground economy
The purchase by a foreign government of an airplane produced in the US is included in U.S
net exports