1. Business cycles are a. periodic fluctuations in real GDP b. declines in GDP t
ID: 1153113 • Letter: 1
Question
1. Business cycles are
a. periodic fluctuations in real GDP
b. declines in GDP that last 6 months or longer
c. no longer observed in the economy
d. the difference between nominal and real GDP
2. US GDP can be found by:
a. Adding up all the spending on US-produced goods and services by business, government, households and foreigners, and subtracting imports.
b. Adding up the value of all final goods produced in the economy.
c. Any method described here is a way to compute GDP.
d. Summing up all the value-added at each stage of production.
e. Adding up all of the income receipts of households, government, and business.
a. salary of Jane, a US citizen accountant working in Korea
b. profits of Randy the Illegal Drug-Dealer
c. the value of a new garage Sam the School Teacher built himself in his back yard
d. amount of a cash gift an ESC student receives from parents
e. salary of Maria, a citizen of Mexico, working legally at a dental office in Queens
4. GDP excludes:
a. services
b. residential housing construction
c. nondurable goods
d. business travel and entertainment
e. used automobiles
5. A good measure of the standard of a country’s living over time is
a. nominal GDP per capita.
b. real GDP per capita
c. total real GDP.
d. total nominal GDP divided by real GDP.
6. The GDP is:
a. the monetary value of all final goods and services produced within a nation in a particular year.
b. the quantity of goods and services, final and intermediate, produced in a given year by US citizens.
c. all goods and services sold in a particular year.
d. the monetary value of all economic resources used in producing a year's output.
a.the volume of stock trade and purchase of used cars
b.public transportation services and government transfers
c.clean environment, crime rate and unpaid work at home
d.medical care and education
a. $1,300
b. $1,700
c. not enough information
d.$3,000
Explanation / Answer
Solution-
1. Business cycles are periodic fluctuations in real GDP.
The correct option is A. periodic fluctuations in real GDP.
Reason-
Business cycle has regular and irregular up and down movements in financial activities and it is measured by fluctuations in real GDP and other macroeconomic variables.
2. US GDP can be found by: Adding up all the spending on US-produced goods and services by business, government, households and foreigners, and subtracting imports.
The correct option is A. Adding up all the spending on US-produced goods and services by business, government, households and foreigners, and subtracting imports.
Reason-
The formula of Expeniture Appoarch of GDP
GDP = Consumption + Investments + Government Spending + Net Expots (Exports - Imports).
4. GDP excludes: used automobiles.
The correct option is E. used automobiles.
Reason-
GDP is the monentary value of all finished good which is produced within a country. GDP does not includes used goods.Finished goods means produced goods which is not used before.
6. The GDP is: the monetary value of all final goods and services produced within a nation in a particular year.
The correct option is A. the monetary value of all final goods and services produced within a nation in a particular year.
Reason-
GDP is the monentary value of all finished good which is produced within a country. GDP does not includes used goods.Finished goods means produced goods which is not used before.
8.Assume net exports are $-200, consumption is $5,000, government purchases are $1,500, and GDP, calculated by the expenditure approach, is $8,000. Find private investment.
The correct option is C. not enough information.
Reason-
The formula of Expeniture Appoarch of GDP
GDP = Consumption + Investments + Government Spending + Net Expots (Exports - Imports).
In given GDP is not given to determine Private Investment.
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