Macroeconomics GDP review
Once economic activity picks up and your sales begin to increase, why might you not immediately start rehiring workers?
Before rehiring you would like to make sure that this economic expansion lasts
Technological progress is affected by:
-private property rights -investment in capital -new software developments -entrepreneurship
Expansion
-production, employment, and income increase
Which of the following does not cause an increase in the quantity of goods and services that can be produced by one worker, or in one hour of work?
An increase in the number of workers
Four major categories of expenditure
Consumption, investment, government purchases and net exports
Which counties have experienced faster economic growth?
Countries that have been generally more open to foreign trade and investment
Which of the following does NOT lead to long-run economic growth?
Increase in average wages
Which of the following is most likely to lead to sustained long-run growth?
Increases in human capital
Potential GDP
Increases over time as technological change occurs and labor force grows
The agency that identifies a recession is the
NBER- National Bureau of Economic Research
One major component of GDP that can be negative is
Net exports
The measure of production that values production using current prices is called
Nominal GDP
GDP deflator=
Nominal/real x 100
Real GDP will increase
Only if the quantity of finals goods and services produced rises
GNP of the U.S. is the market value of all final goods and servixes
Produced by U.S. residents anyway in the world
Which of the following would be included in the GNP of the U.S.
Production from a U.S. firm that operates in Mexico
Recssion
Production, employment, and income decrease
To examine how the total production of an economy has hanged over time, it would be better to examine
Real GDP
Over time, prices may change relative to each other. To take this change into account, the Bureau of Economic Analysis calculates
Real GDP using chain weights
In calculating GDP, which levels of government spending are included in govt purchases?
Spending by federal, state, and local governments
Which of the following changes will ensure that an economy experiences sustained economic growth?
Technological change
When a corp purchases or builds a facility in a foreign country, it is called
Foreign direct investmemt
The output of U.S. citizens who work in Canada would be included in the
GDP of Canada
If an American firm opens a production facility in India, the total value of the production will be included in the
GDP of india
Considers prosecutor that occurs outside he US
GNP
Output of Mexican citizens who work in Texas would be included in the
GNP of mexico
By doing so, government can help promote growth because greater property rights
Give entrepreneurs more incentive to take risks that create new products, ideas, and more technology
Which of the following is a way in which govt can directly promote savings and investment?
Govt can create tax incentives for both businesses and individuals
Potential real GDP
Grows over time
True statement about real and nominal GDP
If real GDP increases from one year to the next, we know that production of goods and services has risen
GDP is
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 houses
Which of the following best describes the effect of the business cycle on the inflation rate and unemployment rate?
The unemployment rate increases and the inflation rate falls during recessions
GNP of the U.S. is equal to
The value of final goods and services produced by the U.S. factors of production
Real GDP is
The value of g & s evaluated at base year prices
The business cycle exists because
Total production experiences periods of increases and decreases
13.
US factors of production larger than
Recession
Unemployment: ^ Durable goods production: D Inflation rate: D
GNP
Value of final goods and services produced by residents of the U.S.
Real GDP is GDP in a given year
Valued in the prices of the base year
Why does inflation make nominal GFP a poor measure of the increase in total production from one year to the next?
When nominal GDP increased from year to year, the increase is due partly to changes in prices and partly to changes in quantities
8.
all the above
12.
outside US & residents smaller than
Which of the following is most likely to lead to sustained long-run growth?
technological change
Which of the following is included in both the U.S. GDP and U.S. GNP
value of all cars produced in U.S.
Nominal GDP is GDP in a given year
valued in the prices of that year
A recession occurs when an economy experienced a period in which there is
A decrease in total production
An example of business fixed investment spending is
A purchase of a computer by an accounting firm
What is the general relationship between the business cycle and unemployment and inflation?
During an expansion, unemployment falls and inflation increases
Why might the unemployment rate continue to rise during the early stages of a recovery?
Employment growth may be slow relative to the growth in labor force and some firms continue to operate well below their capacity even after a recession has ended
At the peak of a business cycle, which of the following is most likely to be true?
Interest rates are rising, and wages are rising faster than prices
The purchase of wheat from a wheat farmer by a bakery
Is not the purchase of a final good
The purchase of French wine by a U.S. Consumer
Is the purchase of a final good
The purchase of a new machine tool
Is the purchase of a final good
The purchase of two new elementary school buildings by the state government
Is the purchase of a final good