Econ Test Review 11/10/22

GDP measures

• Input

• Output

• Weather

• None of the above

Unemployment Rate is

• the measurement of company stocks

• measure % that prices are changing

• determined by CPI

• measures % of people unemployed

What is Gross Domestic Product? Why is this calculated?

• Dollar amount of final goods and services produced in a country’s border in a year.    To measure economic growth.

• Multiply all final goods & services sold by their prices.

• Consumer spending

• Rise in general price levels.  Caused by too much money.

How do you calculate the dollar amount for GDP?

• Multiply all final goods & services sold by their prices.

• The money supply would increase.

• Member banks

• Dollar amount of final goods and services produced in a country’s border in a year.    To measure economic growth.

What areas are not counted when calculating GDP?

• Second hand sales

• intermediate goods

• non-market transactions

• All the above

What is the output expenditure model used in GDP?

• GDP = G/I+C

• GDP = C-I-G

• GDP = C+I+G+ (x-m) 

• GDP/(x-m) + C

Which sector of spending is the largest one in the last formula?

• Consumer spending

• Imports

• Outputs

• Inflation

What is inflation? What causes inflation?

• 2020

• Prices dropping after severe incidents

• Too much air in the sky

• Rise in general price levels.  Caused by too much money.

What is a market basket used for?

• Consumer spending

• So that we can accurately measure economic growth

• Multiply all final goods & services sold by their prices.

• Representation of most commonly purchased goods and services, it is used to make a price index

What is the implicit GDP price deflator used for?

• Rise in general price levels.  Caused by too much money.

• Market basket for the whole economy.  Price index for GDP.

• Real GDP per capita.  Measures price and population changes.

• Representation of most commonly purchased goods and services, it is used to make a price index