Econ Chapter 6

If Nominal GDP= $2.5 trillion and the GDP deflator is 125, then real GDP is equal to:

$2 trillion

With a real GDP of $100 billion in 2016 and of $140 billion in 2017, the real growth would be

40%

Which of the following captures all the components of GDP?

C+I+G+(X-M)

G lives in NYC and gets to work on a 10 minute subway ride. He lives in NYC because of the variety of events, restaurants, museums, education and people to experience on a daily basis. Is G's NYC standard of living reflected in factoring the Gross Domestic Product and why or why not?

G's environmental quality is left out of GDP because GDP focuses on productivity rather than G's well being or standard of living.

Janice has calculated the GDP for 2018 by using the total final goods and services times the 2018 prices of total goods and services. If Janice wishes to create a real value GDP value for 2018, what must she do?

Janice must adjust the total value 2018 GDP for inflation.

Concerning the four phases in the economic cycle, what does the top point in the graph represent?

Peak (highest point in graph)

Which of the following best defines real GDP?

Real GDP is defined as the total dollar value of final goods and services produced within a country in one year after adjustment for inflation.

Which of the following describes the macro economy?

The US inflation rate has been under 2% annually over the last 7 years.

Which of the following is left out of being counted as part of GDP?

The purchase of your next door neighbor's 20 year old house.

Gross Domestic Product (GDP) is designed to measure

a nation's total production of final goods and services.

Your friend asks you what a business cycle means. You tell them that a business cycle reflects changes in real GDP. You tell them that the stages of a business cycle in correct order are:

expansion, peak, recession, trough

Real measurements are

expressed in constant dollars.

If a country/s Gross Domestic Product increased slower than its population increase, the country's GDP per capita would

fall

Gross Domestic Product is a _____ measurement of standard living because _____.

imperfect; not all important determinants of standard living are incorporated

A economy is considered in a recession if

it is moving from the peak toward the trough of the business cycle.

GDP includes

only final goods to avoid double counting when including intermediate goods.

Which of the following best describes a business cycle?

periods of increasing and decreasing real GDP.