Economics Unit 5 Review

Which of these describes how net immigration is determined?

• by calculating the number of people moving into the country
• by calculating the number of people moving of the country
• by adding the number of those entering the country to the number of those leaving it
• by finding the numeric difference between those entering the country and those leaving it

Which of these best describes how a business's creation of output affects individuals?

• It results in the establishment of a base year.
• It generates jobs and therefore increases income.
• It increases the number of nonmarket transactions.
• It reduces the number of secondhand sales and therefore decreases income.

A decline in real GDP lasting at least two quarters or more is called a _______.

• recession
• business flucuation
• peak
• business cycle

Which of these describes the overall trend in U.S. population since the 1970's?

• The North and the East have seen greater growth thanthe West and the South.
• The East and the West have seen greater growth than the North and the South.
• The North and the South have seen greater growth than the East and the West.
• The West and the South have seen greater growth than the North and the East.

The Federal Deposits Insurance Corporation (FDIC) was created to ______.

• prevent working people from being exploited by employers 
• provide bank insurance for depositors
• regulate new companies that were soliciting funds from investors
• help people provide for their own retirement

What does a trough indicate?

• The GDP has stopped declining and has begun to increase.
• The GDP has stopped increasing and has begun to decline.
• The GDP is stagnant.
• The is a GDP gap.

What do we call the ups and downs of real GDP over time?

• trend line
• business cycle
• econometric model
• trough

Which of the following statements best defines the first phase of a business cycle?

• a period during which real GDP increases for at least two quarters in a row
• a period during which real GDP declines for at least two quarters in a row
• the economy reaches the point where real GDP stops going up
• the economy reaches a turnaround point where real GDP stops going down

Why are intermediate products excluded from macroeconomics calculations of GDP?

• because those products are goods, not services
• because their value is included in that of the final product
• because the GDP is a measure of market output on a local level
• because the GDP is a measure of market output on a national level

What is the first step in constructing a price index?

• select a representative selection of commonly purchased goods and services
• sample prices of items in stores across the country 
• divide the cost of every market basket by the base-year market cost
• find the average price of each item in the market basket