AP MACRO UNIT 2 2020

Which of the following is true regarding GDP

• intermediate goods are not counted because GDP does not include imports from foreign countries

• household production, like home auto repair, is counted in GDP

• Transfer payment are not included in GDP because government expenditures are not counted

• GDP includes the purchase and sale of all goods and services in a country in one year

• GDP, adjusted for inflation, measures economic growth over time

Which of the following is included in the calculation of the US GDP

• The money that consumers save when using coupons

• the benefit society receives from a cleaner environment

• online purchases of used products

• a computer produced in CHina by a US owned company

• a plane produced in the US but sold in Mexico

The value of which of the following is counted in the US GDP

• Foreign countries buying US treasury bills

• Transfer payments to the elderly

• salary bonuses given to investment bankers

• undeclared wages paid to illegal aliens

• the change in value of real estate in the US

When calculating GDP, investment is best defined as

• spending on stocks, bonds, and financial assets

• spending by the central bank on government securities

• changes in private and business savings

• business spending on capital goods

• policies that lead to long run economic growth

If a country's nominal percent change in GDP is positive, which of the following must be true?

• The real GDP and/or the price level has increased

• the inflation rate was negative

• The Real GDP increased

• The price level increased

• Both the price level and real GDP increased

Gross Domestic Product is equivalent to the sum of:

• Consumer spending, investment spending, government purchases, exports, and imports

• Consumer spending, investment spending, government purchases, and exports

• Consumer spending, investment spending, government purchases and net exports

• Consumer spending, consumption of fixed capital, government purchases and exports

Which of the following will be included in the current year's calculation of GDP?

• . $50 cash earned but not reported by your neighbor for babysitting

• Purchase of lifeguard equipment at a summer camp

• The purchase of a used car from a friend

• The purchase of a vintage surfboard from thrift store

Which of the following is true regarding nominal and real GDP?

• The only thing that can increase real GDP is an increase in output

• The only thing that can increase nominal GDP is an increase in inflation

• The only thing that can increase nominal GDP is an increase in output

• The only thing that can increase real GDP is an increase in nominal GDP

If real GDP is increasing at 5% per year and nominal GDP is increasing at 10% per year, which of the following is necessarily true?

• Unemployment is increasing

• The economy is in a recession

• The price level is increasing

• Imports exceed exports

Assume the CPI increases from 100 to 120 between 2014 and 2015. Which of the following must be true?

• . A gallon of gas that was $2.50 in 2014 will be $3.00 in 2015

• The price for all goods increased between 2014 and 2015

• There was unanticipated inflation

• . The average price of a specific market basket increased 20%