2025 - GDP & Business Cycle Practice - Pds. 1 & 7

Front

Why is disposable personal income an important factor in measuring the economy’s health?

Back

It represents the actual money people have to spend, invest, and save in the economy.

Front

A business buys new computers for its office workers from a U.S. computer manufacturer. The value of the transaction would be included in which GDP category?

Back

investment sector

Front

Back

Peak/Boom

Front

Back

Recovery/Expansion

Front

Why is real GDP more accurate than nominal GDP?

Back

It is adjusted for price changes.

Front

How can an economist compare the standard of living in two different countries?

Back

by comparing real GDP per capita

Front

Products that would be used in calculating the United States GDP include: toys manufactured in China at a factory owned by a U.S. company, cars manufactured in Tennessee at a factory owned by a Japanese automobile company, plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys, cotton cloth manufactured in India and sold to clothes makers in the United States.

Back

cars manufactured in Tennessee at a factory owned by a Japanese automobile company.

Front

The calculation of GDP would include: the service and of a high school English teacher.

Back

the service and of a high school English teacher.

Front

After people pay their taxes, the amount of money they have left is called

Back

disposable personal income

Front

A massive hurricane hits the United States, wiping out all industry along the Atlantic Coast. The event sends the economy into a downward spiral. In this case, economists would say the business cycle was influenced by

Back

external shocks