Exam 4: Measuring Gdp and Economic Growth

Which of the following is TRUE regarding business cycles? I. Cycles are predictable. II. In each cycle, a peak follows an expansion. III. Potential GDP fluctuates around real GDP.

The factor market can best be described as where

The maximum amount of production that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation is called

Explain how gross investment, depreciation, net investment, and the capital stock are related.

Corporate profits \ 200 Net interest 150 Indirect taxes less sub sidies 230 Depreciation 250 Compensation of employees 1,350 Proprietor's inc ome 150 Rental income 70 Personal consumption expenditures 1,400 Government exp enditure on goods and services 500 Net exports of goods and services 40 -Using the data in the above table, gross private domestic investment equals

Which of the following are equal to one another? I. aggregate production II. aggregate expenditure III. aggregate income

Which of the following items is not a component of the expenditure approach to measuring U.S. GDP?

ʺIf country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B.ʺ Is this statement true or false and explain your answer.

All of the following household expenditures are included in consumption expenditure EXCEPT

Which of the following are examples of the gross private domestic investment component of GDP? I. the purchase of production machinery by IBM II. an increase in the finished goods inventory at Intel

In the definition of GDP, ʺmarket valueʺ refers to

Potential GDP is the

Year Real GDP (trillions of yen) 1991 478 1992 483 1993 484 1994 489 1995 499 1996 516 1997 525 1998 519 1999 520 2000 534 2001 536 -The table above shows Japanʹs real GDP between 1991 to 2001. a) Draw a figure with Japanʹs real GDP from 1991 to 2001. b) In the previous 30 years, the growth rate of Japanʹs potential GDP was 6 percent a year. On your graph, show the path that potential GDP would have followed if its GDP in 1991 was equal to potential GDP and the growth rate of potential GDP had been maintained in 1991-2001. c) Show the Lucas wedge on your figure.

In any year, real GDP

-In the above figure, which point represents a situation with significant shortages of labor, capital, and other resources?

A trend shows

Gross private domestic investment is a component of which approach to measuring GDP?

Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used,__________ has occurred.

In the computation of GDP, social security payments count as

-In the above figure, a trough is at point_________ and a peak is at point _________.