Economic Growth and Recession Quiz

What is the definition of GDP?

• The total market value of all final goods and services provided within an economy.

• The total output of a country at a given time period

• The total market value of all intermediate goods and services provided within an economy by its factors of production in a given period of time.

• The total output of a country over a period of 10 years

Which method of measuring GDP involves adding up the amount of spending by purchasers of final goods?

• Expenditure method

• Output method

• AD method

• Income method

What does Real GDP measure?

• GDP measured at their current market values or prices

• GDP measured assuming the prices are constantly increasing

• GDP measured assuming the prices are unchanged over time

• GDP measured assuming the prices are constantly decreasing

What does the income approach of measuring GDP include?

• Employee compensation, business profits, interest, appreciation, net indirect taxes

• Employee compensation, business profits, interest, depreciation, net direct taxes

• Employee compensation, business profits, interest, depreciation, net indirect taxes

• Employee compensation, business losses, interest, depreciation, net indirect taxes

What does the expenditure method of measuring GDP include?

• C - I + G + NX

• C + I + G + NX

• C + I + G - NX

• C + I - G + NX

What does Real GDP growth rate take out?

• Deflation

• Recession

• Inflation

• Stagnation

What is the potential economic growth?

• An increase in the output of an economy (short-run)

• An increase in an economy’s productive capacity (long-run)

• An increase in an economy’s productive capacity (short-run)

• An increase in the output of an economy (long-run)

What are the causes of economic recession?

• Positive demand-side shocks

• A rise in business and consumer confidence

• A fall in real GDP over a period of six months or more

• A rise in fuel costs

What are the consequences of economic recession?

• Tax revenue may increase

• Unemployment may decrease

• Negative economic growth rate for at least 2 quarters

• Government spending on benefits may decrease

What is the main policy to deal with economic recession?

• Promote economic stability

• Promote economic inflation

• Promote economic growth

• Promote economic inequality