Econ Unit 5 Quiz review.

Economic growth is important to an economy because it generally leads to:

• Increasing wage rate

• A higher standard of living

• Increased job opportunities

• All of these

A new Ford Explorer is counted in this years GDP because it is a(n) _________

• Aggregate demand good

• Used Good

• Intermediate Good

• Final Good

Cotton used by Old Navy for t-shirts _______ counted in the GDP because it is an intermediate good.

• Is

• Is not

• Sometime is and Sometimes not.

• aggregate supply

What is the difference between real GDP and nominal GDP?

• Real GDP takes into account and adjusts for inflation, while nominal GDP does not

• Real GDP allows for depreciation, nominal GDP does not

• Real GDP includes non-market activities, nominal GDP does not

• Real GDP is accurate to the hundreds of dollars, nominal GDP only to the thousands

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

• By seeing how the GDP is distributed

• By measuring physical capital

• By comparing real GDP per capita

• By looking at the quality of life

Our government and the American people want Real GDP to

• Grow

• Shrink

• Shift

• Remain stable

In which situation are consumers more likely to spend more and save less...

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In which situation are consumers more likely to save more and spend less...

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Price level increased and GDP/Employment decreased

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Price level decrease and GDP/Employment increased

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