Unit 5 Measuring the Economy

The inflation rate is

• the ability to buy goods or services

• measured in fixed dollars

• not an important measure to economists

• the percentage change in prices over time

Inflation reduced people's purchasing power because

• the same amount of money buys ore goods and services

• the same amount of money buys fewer goods and services

• the market basket has to be changed every year

• there is not enough money in the economy

Is this counted in the GDP of the US?

The federal government purchases a new submarine for the US Navy.

• Yes

• No

In which part of the GDP calculation does this fit?

You spend $15 at AMC to see the latest Avengers movie.

• Consumer spending

• Government spending

• Investment spending

• Net exports

In which part of the GDP calculation does this fit?

The US military spends $5 billion on five new helicopters.

• Consumer spending

• Government spending

• Investment spending

• Net exports

In which part of the GDP calculation does this fit?

The local taxi service purchases new vehicles for the

company.

• Consumer spending

• Government spending

• Investment spending

• Net exports

In which part of the GDP calculation does this fit?

Australia exported $6 billion worth of goods in 2018, but imported $10 billion in goods.

• Consumer spending

• Government spending

• Investment spending

• Net exports

Which of the following would be included in the calculation of GDP?

• Final goods

• Intermediate goods

• Second hand goods

• Black market activity

The _______ is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

• Consumer Price Index

• Aggregate supply

• Producer Price Index

• Aggregate demand

According to the wage-price spiral, if a company gives a worker a raise in pay, what must they also do?

• Raise the price of their products

• go out of business

• lower the price of their products

• merge with a competitor