Exam 5: Introduction to Macroeconomics

Government spending is generally a very unstable component of GDP.

In a country with income concentrated in the hands of a small group of people, median household income would be a better measure of the standard of living of a typical citizen than GDP per capita.

Which of the following items would NOT be included in "Investment" in the GDP calculation?

(Table) According to the table, using the income approach, national income is equal to: Category Billions of Dollars Proprietors' income 300 Capital consumption allowance 440 Federal government purchases of goods and services 200 Compensation of employees 800 Personal consumption expenditures 950 Corporate profits 90 Exports 60 Gross private domestic investment 500 Rental income 30 State and local government purchases of goods and services 150 Net interest 100 Federal government deficit 250 Imports 90

A sheep ranch produces $30 worth of wool. A suit manufacturer produces $60 worth of suits. A retail outlet sells a suit to a customer for $180. The change in GDP would be:

What event was a major influence on the development of macroeconomics?

A double-dip recession is a recession that begins after only a short period of economic recovery from the previous recession.

Which component of GDP includes inventory changes?

Marci is 11. She walks her neighbors' dogs for cash. Her income from this service is probably part of the informal economy.

The main idea of a circular flow diagram is that every dollar spent in an economy becomes a dollar of income to someone else.

(Table) Look at the above table (Macroeconomic Data for Econoland); what stage of the business cycle would the NBER declare Econoland to be in during the 4th quarter of 2014? Quarter GDP Unemployment rate 1 st 2014 S800 billion 5\% 2nd 2014 s808 billion 4\% 3 rd 2014 \ 808 billion 4\% 4th 2014 5800 billion 5\% 1 st 2015 S790 billion 6\% 2nd 2015 5790 billion 6\% 3rd 2015 \7 95 billion 5.5\% 4th 2015 s800 billion 5\% 1 st 2016 5800 billion 5\% 2nd 2016 S785 billion 6.5\% 3rd 2016 5780 billion 7\% 4th 2016 S790 billion 6\%

A major reason to collect economic data for national income and product accounts is to guide the government in appropriate economic policy.

Which one of the following transactions would be included in the national income and product accounts?

Most of the recessions over the past half century have lasted between:

GDP can be determined by using either the spending (right) side or the income (left) side of the circular flow diagram.

Which of the following activities is an example of a nonmarket transaction?

China's GDP per capita would have been higher if not for the deterioration in its environment.

Which of the following would not be included in official GDP measures?

(Table) According to the table below, when using the expenditure approach, GDP is: Category Billions Proprietors' income \ 300 Capital consumption allowance 440 Federal government purchases of goods and services 200 Compensation of employees 800 Personal consumption expenditures 950 Corporate profits 90 Exports 60 Gross private domestic investment 500 Rental income 30 State and local government purchases of goods and services 150 Net interest 100 Federal government deficit 250 Imports 90

GDP per capita fully reflects the standard of living of a typical citizen of a country.