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This is the book we are using in class, or selected chapters of the bok. Chapter

ID: 1191693 • Letter: T

Question

This is the book we are using in class, or selected chapters of the bok.

Chapter 6 “The Macroeconomic Perspective” in the text Principles of Macroeconomics, by Timothy Taylor
and Steven A. Greenlaw, developed by OpenStax College, licensed by Rice University, and available on
the Connexions website, is available under a Creative Commons Attribution 3.0 Unported license. ©
2014, Connexions.

Question 19 (1 point) Consumption in the United States is about ____________ of GDP, and it moves relatively little over time.

a)

90%

b)

10%

c)

33%

d)

68%

Question 20 (1 point) Final goods or services used to compute GDP refer to::

a)

goods and services purchased by the ultimate users.

b)

the factors of production used to produce output.

c)

the value of outstanding shares of stock of manufacturing firms.

d)

the sum of all wages paid to laborers.

Question 21 (1 point) ___________ is about two-thirds of the demand side of GDP, but it moves relatively little over time.

a)

Consumption

b)

Government

c)

Investment

d)

Services

Question 22 (1 point) GDP is:

a)

the value of all final good and services produced anywhere in the world by a nation's firms.

b)

the value of all final goods and services produced by a government.

c)

the value of all final goods and services produced domestically.

d)

the sum of all currency and coins in circulation.

Question 23 (1 point) Which of the following are most likely classified by economists as consumer durable goods?

a)

drugs, toys, magazines, books

b)

automobiles, furniture

c)

stocks, bonds

d)

food, clothing

a)

90%

b)

10%

c)

33%

d)

68%

Explanation / Answer

Answer to Question 19: Consumption in the United States is about 68% of GDP, and it moves relatively little over time.
REASON: The USA has a large domestic population for consumption of goods and services.Consumerism and purchase of luxury items have seen a continuos rise over the years.

Answer to Question 20: Final goods or services used to compute GDP refer to: goods and services purchased by the ultimate users.
REASON: GDP refers to the Gross Domestic Product. The final goods and services are those which are purchased by the ultimate consumers for consumption only, and not for resale.

Answer to Question 21: Consumption is about two-thirds of the demand side of GDP, but it moves relatively little over time.
REASON: GDP = C + I + G (in closed economy), and
   GDP = C + I + G + (X - M) + (R - P) (in open economy)
"C" refers to consumption. Consumption is the highest contributor to the GDP. It consists of Durable goods. non durable goods and services.

Answer to Question 22: GDP is: the value of all final good and services produced domestically.
REASON: GDP refers to Gross DOmestic Product which is calculated generally for a period of one year.

Answer to Question 23: Which of the following are most likely classified by economists as consumer durable goods? automobiles, furniture.
REASON: Consumer goods are those goods which are purchased by consumers. Durable goods are those category of goods which do not require a repurchase and tend to be there in the long run. Automobiles and furniture are not purchased on a daily basis.

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