Gross Domestic Product | Q&A – Flashcards
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Nominal gross domestic product
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Can change when there is a change in either output or price level
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Refer to the data. Gross domestic product in this economy is
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$1079 billion
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Refer to the data. Personal income in this economy is
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$656 billion
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GDP Price index measures changes in
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Prices of output produced in the nation
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In an economy, the total expenditures for a market basket of goods in year 1 was $5000 billion. In year 2, the total expenditure for a basket of goods was $5500 billion. What was the GDP price index for the economy in year 2?
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110
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In year 1, nominal GDP for the US was $2250 billion and in year 2 it was $2508 billion. The GDP deflator was 72 in year 1 and 79 in year 2. Real GDP rose by
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1.6 percent
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Nation A's real GDP was $520 billion in 2013 and $550 billion in 2014. Its population was 150 million in 2013 and 155 million in 2014. Which of the following is true
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Nation A's and Nation B's GDP per capita both increased from 2013 to 2014
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In the expansion phase of a business cycle
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Employment and output increase
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The unemployment rate is interpreted as the percentage of the
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Labor force that are not employed
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Which of the following is the correct way to calculate the unemployment rate?
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(Unemployed/labor force) * 100
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The best example of a frictionally unemployed worker is one who
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Is in the process of voluntarily switching jobs
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Kevin has lost his job in an automobile plant because the economy switched to robots for its welding step in the assembly line. The type of unemployment Kevin is faced with is
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Structural
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When a US importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will represent a
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DEBIT on the CURRENT account of the US balance of payments
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In the aggregate demand-aggregate supply model, the economy's price level s assumed to be
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VARIABLE, UNLIKE in the aggregate expenditures model
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The following factors explain the inverse relationship between the price level and the total demand for output except:
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A substitution effect
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The interest rate effect on aggregate demand indicates that a
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DECREASE in the price level will DECREASE demand for money, DECREASE interest rates, and INCREASE consumption
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An increase in personal income tax rates will cause a
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Decrease in aggregate demand
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A decrease in expected returns on investment will most likely shift the AD curve to the
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LEFT because IG will DECREASE
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If the national incomes of our trading partners increase, then our
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Aggregate demand INCREASES because NET EXPORTS INCREASE
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Which of the following factors will shift AD1 to AD2
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An increase in national incomes abroad
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Which of the following changes will shift AD1 to AD2
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A cut in personal and business taxes
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Refer to the list. Investment spending would most likely be influenced by changes in
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5 and 10
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The slope of the immediate-short run aggregate supply curve is based on the assumption that
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Both input and output prices are fixed
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The upward slope of the short-run aggregate supply curve is based on the assumption that
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Wages and other resource prices do not respond to price level changes
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The long-run aggregate supply analysis assumes that
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Both input and product prices are variable
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If the price of crude oil decreases, then this would most likely
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Increase aggregate SUPPLY in the US
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If Congress passed new laws significantly increasing the regulation of business, this action would tend to
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INCREASE per-unit production costs and shift the aggregate supply curve to the LEFT
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If personal income taxes and business taxes increase, then this will
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Decrease aggregate demand and aggregate supply
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The US economy was able to achieve full employment with relative price level stability between 1996 and 2000 because aggregate
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Demand increased and aggregate supply increased
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Collective bargaining agreements that prohibit wage cuts for the curation of the contract contribute to
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A price level that is inflexible downward
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When the Federal government cuts taxes and increases spending to stimulate the economy during a period recession, such actions are designed to be
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Countercyclical
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Refer to the figure above. The economy is at equilibrium at point B. What would expansionary fiscal policy do?
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Move the economy from point B towards point A
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A budget surplus means that
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Government revenues are greater than expenditures in a given year
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A Federal budget deficit is financed by the
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Government issuance or sale of Treasury securities
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The crowding-out effect from the government borrowing to finance the public debt is reduced when
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Public investment complements private investment
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Which country is the United States's largest trading partner in terms of volume of trade
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