Which of the following statements BEST describes the concept of the business cycle?

alternating periods of economic growth and decline

is GDP adjusted for price changes

Which of the following statements BEST distinguishes between the terms recession and depression?

A depression is longer and more severe than a normal recession

Economic growth is best defined as

a sustained increase in real GDP per capita over time.

Which choice describes a macroeconomic calculation?

calculating the unemployment rate

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The Macroeconomic Perspective

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Questions 15

Answers

1
GDP measures
B. Production by a nation’s citizens wherever they may be
C. Spending by consumers, businesses and governments
A. Production within a nation’s borders
A and C are correct
2
An Italian company opens a shoe factory in the U.S. The production from this shoe company is included in
neither the Italian or U.S. GDP
the Italian GDP
both the Italian and U.S. GDP split 50/50
The U.S. GDP
3
Which of the following events has NO effect on GDP?
The sale of a new car
Child care provider by a licensed day care center
The cost of hospital stays
The sale of a used car
4
All elements that affect people's happiness, whether these elements are brought and sold in the market or not
A poverty
B standard of living
C capital goods
D human capital
5
The tomatoes you grow in your summer garden are
Counted in GDP under I
Counted in GDP but not in NNP
Not counted in GDP
Counted in GDP under C
6
Which of the following is NOT included in GDP?
Imports
Federal government purchases of goods and services
State and local government purchases of goods and services
The change in business inventories
7
What are the two main phases of the business cycle?
C expansion and trough
B recession and expansion
D peak and trough
A recession and depression
8
Which of the following statements BEST describes the concept of the business cycle?
the flow of money from businesses to households as income
the flow of funds from product markets to factor market
the flow of goods from businesses to households
alternating periods of economic growth and decline
9
Real GDP
is not calculated for the United States
is also called current- dollar GDP
Is actual GDP as opposed to the estimate made by the B E A
is GDP adjusted for price changes
10
Which of the following statements BEST distinguishes between the terms recession and depression?
A depression is longer and more severe than a normal recession
A depression affects the households, a recession affects businesses
A recession is a period of inflation, a depression is a period of deflation
A recession is a period of economic growth, depression of economic decline
11
GDP helps economists measure the economic goal of
C economic security.
D full employment.
A economic growth.
B price stability.
12
Economic growth is best defined as
a sustained increase in real GDP per capita over time.
an increase in nominal GDP.
an increase in real GDP.
any increase in nominal GDP per capita.
13
Which choice describes a macroeconomic calculation?
calculating a firm's annual profit
calculating the interest on a personal loan
calculating the unemployment rate
calculatinga family's monthly budget
14
In the equation GDP = C + I + G +X, X stands for:
Exports
Imports - Exports
Exports - Imports
Imports
15
Calculate GDP for an imaginary economy that produces only cheese (10 lb. for $3/lb)and crackers (20 lb. for $2/lb)
$150
$120
$35
$70

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