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GDP and Business Cycle

Total questions: 15

Worksheet time: 14mins

Name
Class
Date
1.

Gross Domestic Product measures the value of...

a)

Goods and services produced in the United States.

b)

Goods produced by any American owned company anywhere in the world.

c)

Any product produced in the United States during a 3 year period

d)

Good or service produced in Germany and sold in the United States

2.

What is the formula for GDP?

a)

C + I + G + (X-M)

b)

C + I + G / (X-M)

c)

C + I + G + (population)

d)

C + I + G + (Reserve Ratio)

3.

East Dublin purchases a new fire truck. Where would this show up in GDP formula? (GDP=C+I+G+(X-M))

a)

Consumption (Consumer)

b)

Investment (Business)

c)

Government Spending

d)

Exports-Imports

4.

Costco builds a new store in Dublin. Where would this show up in the GDP formula? (GDP=C+I+G+(X-M))

a)

Consumption (Consumer)

b)

Investment (Business)

c)

Government Spending

d)

Exports-Imports

5.

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

a)

Consumption (Consumer)

b)

Investment (Business)

c)

Government Spending

d)

Exports-Imports

6.

The total dollar value of all final goods and services produced within the country’s border in a given year after inflation is taken out of the data.

a)

Nominal GDP

b)

GDP/capita

c)

Gross GDP

d)

Real GDP

7.

Why is real GDP more accurate than nominal GDP?

a)

It's adjusted for price changes

b)

It's adjusted for depreciation

c)

It includes unpaid and paid work.

d)

It includes unrecorded business.

8.

If you graph Real GDP, then you have created...

a)

An economic forecast

b)

An Inflation Index

c)

The Business Cycle

d)

Labor Output Graph

9.

The Lowest point in the business cycle

a)

Peak

b)

Trough

c)

Expansion

d)

Contraction

10.

Which letter represents the Contractionary (Recession) Phase?

a)

A

b)

B

c)

C

d)

D

11.

Which phase of the Business Cycle includes the economy slowing down?

a)

Prosperity

b)

Recession

c)

Depression

d)

Recovery

12.

Points 1 and 4 represent

a)

Peaks and expansion

b)

Troughs and recession

c)

Peaks and depression

d)

Contraction and expansion

13.

What is the biggest difference between a "recession" and a "depression"?

a)

Length and severity of economic contraction

b)

Depressions are more frequent than recessions

c)

Depressions only happen when banks fail

d)

Recessions are more severe than depressions

14.

Which of the following is a peak?

a)

A

b)

B

c)

C

d)

D

15.

Which of the following is a recession, or contraction?

a)

A

b)

B

c)

C

d)

D