Economy: Chapter 12 – Flashcards

An accurate statement about the Great Depression is . . . it was a normal part of the business cycle. it was caused primarily by overspending on government programs. it ended largely because of an increase in defense spending related to World War II. while its effects were severe among the lowest income levels, it had little impact on the wealthy.

The amount of money a person has left of their income after taxes: aggregate income personal income national income disposable personal income

Compared with the income approach to calculating GDP, the expenditure approach is . . . more accurate. more practical. preferred by most economists. preferred by the average consumer.

GNP minus the cost of depreciation of capital equipment is . . . real GDP. nominal GDP. national income. net national product.

The loss of the value of capital equipment that results from normal wear and tear: stagflation aggregate demand depreciation gross domestic product national income accounting

Products that would be used in calculating GDP include . . . toys manufactured in China at a factory owned by a U.S. company. cars manufactured in Tennessee at a factory owned by a Japanese automobile company. plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys. cotton cloth manufactured in India and sold to clothes makers in the United States.

The calculation of GDP would include . . . the sale of a 25-year-old house. the income of a person who pays rent by babysitting for the homeowner's children. the income of a high school English teacher. the price of the steel used to build a new hotel.

The dollar value of all final goods and services produced within a country's borders in a given year: stagflation aggregate demand depreciation gross domestic product national income accounting

The agency that maintains the National Income and Product Accounts (NIPA) is ____________ . the U.S. Department of the Treasury. the U.S. Department of the Interior. the U.S. Department of Defense. the U.S. Department of Commerce.

Key economic variables that economists use to predict a new phase of a business cycle: cycle points standards and checks leading indicators production flows progress tickers

The annual income earned by U.S.-owned firms and U.S. residents: gross national product national income accounting leading indicators aggregate supply aggregate demand

Three of the choices below are main economic variables that affect business cycles. Select the choice that is not a main economic variable that affects business cycles. interest rates external shocks personal savings levels business investment levels

Compared with the expenditure approach to calculating GDP, the income approach is . . . more practical. more accurate. preferred by the average consumer. connected more strongly to stock market performance.

A decline in GDP combined with a rise in the price level: stagflation aggregate demand depreciation gross domestic product aggregate supply

The total amount of goods and services in the economy available at all possible price levels: aggregate demand aggregate supply depreciation gross domestic product national income accounting

An example of capital deepening would be . . . permitting two workers to share one job. paying for an employee to take college courses. laying off employees when a factory is modernized. moving a manufacturing plant overseas where labor costs are lower.

GDP expressed in constant (unchanging) prices is called ____________ . real GDP. price level. nominal GDP. net national product.

An increase in efficiency gained by producing more output without using more inputs: boilerplating donut holing leading indicators production scaffolding technological progress

A system that collects macroeconomic statistics on production, income, investment, and savings: stagflation aggregate demand depreciation gross domestic product national income accounting

The lowest point in an economic contraction: peak trough recession depression

An example of a nondurable good is ____________ . a new car. a used car. a frozen pizza. a washing machine