Econ Unit 3: Economic Performance

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"The amount in dollars of all final goods and services produced in a country in a year" is a definition of

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Gross Domestic Product

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True or False: Gross domestic product (GDP) includes products produced by American companies outside of the U.S.

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False

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Inflation is an indication of:

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a general increase in all prices of goods and services

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The Consumer Price Index (CPI) is used to measure:

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the rate of inflation

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What is the Consumer Price Index (CPI)?

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It tracks the changes in prices of a selection of goods and services from year to year.

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In times of deflation, prices start to go down. Is this good or bad for an economy?

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This is bad, because it is a sign that demand is down and the economy is shrinking.

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What does the government do to help combat the effects of inflation on people living on fixed incomes? Options: pass cost of living adjustments (COLA) for those on Social Security, lower the retirement taxes, give them low interest rate loans, offer more social services

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pass cost of living adjustments (COLA) for those on Social Security