When economists refers to the gross domestic product (GDP), they mean

• all final goods and services produced in an economy in a year

• the total expenditure of consumer and government spending in an economy in a given year

• all final goods and services produced in an economy in a year, including overseas branches and divisions

• all final goods and services produced in an economy in a five-year time period

• all intermediate and final goods and services produced in an economy in a year

All of the following would be included in the expenditure approach to calculate GDP EXCEPT

• consumer spending

• government investments

• private investments

• consumer spending and savings

• net exports

Based on the information in the preceding chart, the GDP would be calculated as

Use the following data. The information is in billions of dollars.

• $1,975 billion

• $2,150 billion

• $2,500 billion

• $1,675 billion

• $1,950 billion

Jason and Mary purchased a new house in 2012 for $300,000. This purchase would be included in the GDP as

• consumer savings

• government investment

• investment

• consumption of private fixed capital

The most significant difference between nominal GDP and real GDP would be

• the value of current production at the current prices

• expressing the changing value of prices over time

• using prices from a fixed point in time

• utilizing the consumer price index

• calculating fluctuations in stock market prices

Which of the following are considered leakages from the circular flow model?

• Taxes and savings

• Taxes and the price of capital goods

• Savings and the price of natural resources

• Taxes and interest rates

• Interest rates and automatic stabilizers

The amounts businesses are willing and able to invest at each possible level of GDP is known as the

• investment schedule

• aggregate supply schedule

• aggregate demand schedule

• nominal rate of interest

• marginal propensity to consume

An example of a final good calculated into the GDP for the year would be

• a computer chip bought by IBM to be used in a computer

• a used car sold to a consumer

• a new car sold to a consumer

• the lumber used to construct a new house

• all of the above

In the simple circular flow model

• individuals and householders are sellers of resources and demanders of products

• householders are sellers of products and demanders of resources

• the GDP is represented by the number of households and businesses in the economy

• businesses are sellers of resources and demanders of products

• businesses are sellers of products and sellers of resources

The circular flow model illustrates

• that workers, entrepreneurs, and owners of land and capital offer their services through product markets

• the structures of both command and capitalist economic systems

• that workers, entrepreneurs, and owners of land and capital offer their services through national agencies

• that workers, entrepreneurs, and owners of land and capital offer their services through a resource market

• how the Federal Reserve buys and sells bonds to stimulate the economy