GDP/Business Cycle

The U.S. Government hired 10 Chinese-language experts to train U.S. Workers.

• GDP increases
• GDP decreases
• No change

Lauren coaches softball and gets paid in cash each week.  Is this included in GDP?

• Yes - Consumer Spending
• Yes - Investment 
• No - Underground Economy
• No - Purely financial transaction 

High levels of GDP per capita indicate...

• Higher levels of happiness 
• Higher standard of living
• Equal levels of wealth 
• Self-sufficient communities

The Expenditures Approach of Calculating GDP includes...

• All spending on final products in the year.
• All Income made from selling all final goods.
• All costs on all products.
• The amount of people involved in production.

How can a country increase its GDP?

• By selling goods and services around the world.

• By increasing finished goods and services inside the country.

• By acquiring goods and services from another country.

• By selling cakes in the market.

If you make dinner for yourself

• the market value of your dinner is added to GDP. 
• your service in preparing the meal is valued at a cook's wage and added to GDP. 
• none of what you bought to prepare for dinner is included in GDP. 
• only the market value of ingredients that you purchased this year is added to GDP.

Honda has an assembly plant for Civics in Ohio. The production of U.S.-made Civics is

• added to U.S. GDP. 
• added to Japan's GDP because Honda is a Japanese company. 
• not included in either the U.S. or Japanese GDP. 
• added to U.S. GDP only if the Civic is sold in the United States in the year it is produced. 

Which of the following is a final good or service? 

• the grilled chicken purchased by Taco Bell for use in their burritos 
• a new replacement muffler installed by Midas Mufflers 
• the fertilizer purchased by Royal Lawn and Landscape 
• the computers purchased by Office Depot for sale to its customers 

Consumption expenditures are defined as spending on goods and services by

• households, businesses and government.
• businesses and government.
• households. 
• households and businesses.

Investment is defined as the purchase of

• any financial asset only.
• additions to inventories only.
• financial assets and inventories only.
• the purchase of new capital goods and additions to inventories.