Ap Macroeconomics Chapter 4 Measuring GDP and Economic Growth + quiz review

​______ good is an item that is bought by its final user during a specified time period. ​______ good is an item that is produced by one​ firm, bought by another​ firm, and used as a component of a final good or service.

A​ final; An intermediate

Imports

goods produced abroad and sold domestically

Exports

goods produced domestically and sold abroad

Real GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices in​ _____ year. Nominal GDP is the value of the​ _____ goods and services produced in a given year expressed in terms of the prices of ​ _____ year.

inal; a​ base; ​final; that same

Real GDP per person

real GDP divided by the population

An expansion is a period during which​ _____.

real GDP increases

investment

spending on capital equipment, inventories, and structures

Exports of goods and services are items that firms in​ _____ produce and sell to​ _____.

the United​ States; any other country

net investment

the amount by which the value of capital increases net investment=gross investment - depreciation

Market Value

the amount for which something can be sold on a given market.

Net Domestic Income

the cost of the factors of production used to produce final goods

Depreciation

the decrease in value of a firm's capital that results from wear and tear and obsolescence

statistical discrepancy

the gap between the two measures of GDP

(GDP) Gross domestic product

the market value of the final goods and services produced within a country in a given time period

Potential GDP

the maximum level of real GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurial ability that would bring rising inflation

Income Approach

measures GDP by summing the incomes that firms pay households for the factors of production they hire

Which of the following countries is facing a recession​?

​Japan's real GDP of 3.8 percent in the first quarter decreased by 0.3 and 0.4 percent respectively in the second and third quarters of 2012.

Depreciation is the​ _____ in the value of​ _____ that results from its use and from obsolescence.

​decrease; capital

The business cycle is a​ _____ but​ _____ up-and-down movement of total​ _____ and other measures of economic activity.

​periodic; irregular; production

subsidy

A government payment that supports a business or market

During a​ year, a​ firm's gross investment is ​$8,000 and net investment is ​$6,400. The​ firm's depreciation is​ ______.

$1,600

Aggregate income in an economy in 2014 is ​$995 billion. Saving is ​$30 billion and imports are ​$35 billion. Aggregate expenditure in the economy in 2014 is​ ______.

$995 billion

Indirect tax

(n.) A tax, such as a sales tax or value-addes tax, that is levied (placed) on goods or services rather than individuals and is ultimately paid by consumers in the form of higher prices.

Which of the following is an example of investment​?

Continental buying Airbus planes

Which of the following is an example of a final good or service​?

Dan bought a Toyota Camry.

Which of the following is an example of an intermediate good or service​?

Samsung buys compressors for manufacturing refrigerators.

Which of the following is an example of consumption expenditure​?

Rachel buying a TV.

Which of the following is an example of government expenditure on goods and services​?

The White House buying internet services.

Net exports of goods and services

The value of exports of goods and services minus the value of imports of goods and services.

expansion

a period during which real GDP increases

Recession

a period during which real gdp decreases its - its growth rate is negative- for at least 2 successive quarters

business cycle

a periodic but irregular up-and-down movement of total production and other measures of economic activity

Purchasing Power Parity

a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries

Sugar purchased by Angelo's bakery to make pies and cakes is an example of​ ______ good. Shares in Ford Motor Company is an example of​ ______ good Flour purchased to make pizza is an example of​ ______ good. Cough medicine purchased by Tracy who has a cold is an example of​ ______ good.

an intermediate; neither a final nor intermediate an intermediate;a final good

Final good or service

an item that is bought by its final user during a specified time period

Intermediate good or service

an item that is produced by one firm, bought by another firm, and used as a component of a final good or service

gross

before subtracting the depreciation of capital

The total amount spent​ _____ is called gross investment.

both buying new capital and replacing depreciated capital

Real GDP per person is real GDP​ _____.

divided by the population

gross private domestic investment

expenditure on capital equipment and buildings by firms and the additions to business inventories

net exports

exports minus imports

This purchase of paper​ ______ part of GDP because the paper is​ ______ good. The value of the paper is counted in GDP as​ ______.

is​ not; an intermediate part of the value of the textbook

domestic

product is produced within a country

Nominal GDP

the value of final goods and services produced in a given year when valued at the prices of that year

underground economy

the part of a country's economic activity that is unrecorded and untaxed by its government.

compensation of employees

the payment to, and the income received by, labor, including wages, salaries, and in-kind fringe benefits

Choose the option that is an example of government expenditure.

the purchase of telephone service for the house of representatives

gross investment

the total amount spent on purchases of new capital and on replacing depreciated capital

aggregate income

the total income received by all factors of production in a given period

consumption expenditure

the total payment for goods and services

The amount by which​ _____ is called net investment.

the value of capital increases

Real GDP

the value of final goods and services evaluated at base-year prices

Government expenditure

when governments buy goods and services from firms

The goods and services that we sell to people in other countries are​ ______. The goods and services that we buy from people in other countries are​ ______.

​exports; imports; called net exports

Net exports of goods and services is the value of​ _____ of goods and services​ _____ the value of​ _____ of goods and services.

​exports; minus; imports

Gross domestic product ​(GDP​) is the market value of all the​ _____ goods and services produced​ _____ a country in a given time period.

​final; within

Imports of goods and services are items that​ _____ in the United States​ _____ the rest of the world.

​households, firms, and​ governments; buy from

Potential GDP is the value of real GDP when all the​ economy's factors of production​ - _____,​ _____, _____, and​ _____ - are fully​ _____.

​labor; capital;​ land; entrepreneurial​ ability; employed