Econ Study Guide – Flashcards
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The market value of all final goods and services in an economy produced by resources owned by people of that economy:
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gross national product
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The sum of payments made to resource owners for the use of their resources is:
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National Income
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GDP underestimates our economic well-being:
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because it ignores leisure.
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In the circular flow model, who is a seller in the factor markets and a buyer in the product markets?
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Households
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Capital goods, like factories and machinery, are classified as intermediate goods.
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False
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Fixed investment refers to investment in stocks, bonds, and improvements to land.
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False
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Intermediate goods are included and final goods are not included in calculating gross domestic product.
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False
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Which of the following would be included in the government expenditures component of GDP?
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Construction costs of a new public school building
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Capital goods, like factories and machinery, are classified as intermediate goods.
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false
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To construct GDP, exports:
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must be included and imports must be subtracted.
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To get Personal Income from National Income, one must:
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. subtract corporate profits and Social Security taxes, and add in transfer payments and other income
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Which of the following would be counted as a final good for inclusion in GDP?
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A piece of glass bought this year by a consumer to fix a broken window.
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The GDP of a country can be derived by summing the:
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expenditures on final goods and services produced domestically during the year.
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How do we measure economic growth?
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increases in real GDP.
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Economists use the phrase "business cycle" when referring to fluctuations in:
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real GDP
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The period of declining growth in real GDP between the peak of the business cycle and the trough is called a:
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recessionary phase.
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Which of the following is associated with peaks in the business cycle?
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?Relatively low levels of unemployment.
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The period of growth in real GDP between the trough of the business cycle and the next peak is called the:
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expansionary phase
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Which of the following will most likely occur during the recessionary phase of a business cycle?
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The sales of most businesses decline, and the unemployment rate rises.
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Which of the following will most likely occur during the expansionary phase of a business cycle?
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Real GDP rises, and unemployment falls.
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Economists usually use the term "recession" to refer to:
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two or more consecutive quarters of declining real GDP.
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Which of the following is true of the business cycle record of the United States?
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Since 1950, the fluctuations in GDP have been less severe than before 1950
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The period during which real GDP falls during a business cycle is called:
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recession
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The phase of the business cycle that follows a recession is known as the:
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trough
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As a general rule, a recession is a decline in real GDP lasting at least:
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six months.
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As a general rule, a recession occurs when there is a six consecutive month fall in:
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real GDP
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Since World War II, the average length of recessions in the United States has been:
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11 months.
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A business cycle is the period of time in which:
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there are four phases: peak, recession, trough and expansion.
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What stage of the business cycle immediately follows the trough?
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Recovery.
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The ____ phase of the business cycle follows a recession.
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trough
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A phase in the business cycle in which the economy's real GDP declines is known as:
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a recession.
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A long and deep recession in the business cycle is:
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a depression
