GDP/Business Cycle

What are the two parts of economics?

(a)  

• Microeconomics and macroeconomics
• Supply and demand

• Gross Domestic Product and unemployment

• Inflation and interest rates

What are the three economic goals of policy makers?

• Economic growth, low unemployment, and stable prices

• High inflation, high interest rates, and high taxes

• Government control, income inequality, and international trade

• Consumer spending, business investment, and government spending

What is Gross Domestic Product (GDP)?

• The value of all final goods and services produced within a country's border in a specific period of time

• The total amount of money in circulation within a country

• The total value of a country's exports minus imports

• The amount of money earned by the government through taxes

What does Real GDP represent?

(a)  

• GDP adjusted for inflation
• GDP measured in raw number of things produced

• GDP including illegal activities

• GDP including household production

What is the business cycle?

• The expansion and contraction of an economy over time

• The fluctuation of interest rates in the stock market

• The rise and fall of consumer spending

• The increase and decrease of government debt

John went to Sports Clips and purchased a haircut. Where would this show up in the GDP formula?

• Consumption (Consumer)

• Investment (Business)

• Government Spending

• Exports-Imports

If GDP falls for at least 2 Quarters, it is considered what stage of the business cycle?

• Expansion

• Recession

• Prosperity

• Recovery

Is this counted in the GDP of the US?

Cars made by a Japanese company in California.

• Yes

• No

Is this counted in the GDP of the US?

Cars made by a US company in South Korea.

• Yes

• No

Is this counted in the GDP of the US?

The materials (lumber, cement, bricks) used to build a house.

• Yes

• No