Exam 6: Introduction to Macroeconomics and Gross Domestic Product

Consider the following data to answer the next questions: Country GDP Population A \ 32,000 1,500 B \ 20,000 1,000 C \ 10,000 500 D \ 10,000 2,000 E \ 8,000 800 -Although countries C and D have the same level of gross domestic product GDP), country C has a level of per capita GDP that is ______times that of country D.

A country's nominal gross domestic product GDP) has declined over the last year. Are the people in the country necessarily worse off, on average? Explain.

If real gross domestic product GDP) grew by 4 percent and nominal GDP grew by 3 percent, then the inflation rate was

Explain how the difference between nominal and real gross domestic product GDP) arises, and draw a graph to illustrate the difference between them.

When John buys new tires for his car it ______, and when Ford buys tires to put on new cars it_____.

Economists measure the total output of an economy in order to

When George buys a new computer for his business, it is included in gross domestic product GDP) as ______, and when he buys a new computer for use at home, it counts as______ .

Explain why a country with a lower level of real gross domestic product GDP) per capita might have a higher level of well-being in comparison to a country with a higher level of real GDP per capita.

The phase of the business cycle where economic activity is decreasing is called

When an unemployed worker receives a payment from the government as a result of being unemployed, it is

The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called

Real gross domestic product GDP) would be a better measure of economic well-being if it included the value of

For the next questions, suppose a country has the following quarterly growth data for the last three years: Year Q1 Q2 Q3 Q4 2010 3.1 percent 3.2 percent 2.2 percent 1.2 percent 2011 3.1 percent -4.1 percent -2.2 percent 1.5 percent 2012 1.3 percent 1.2 percent 3.2 percent 3.3 percent -The country's long-run average growth rate is 3 percent. In how many of these quarters did gross domestic product GDP) contract?

The phase of the business cycle where the economy is growing faster than usual is called

Consider the following data, which shows the quantities and prices of two goods produced in theeconomy, to answer the next questions: Quantity produced Price Cell phones 5 million \ 100/ cell phone Pizza 25 million \ 10/ pizza -The market value of cell phones is

"'One U.S. dollar is worth eighteen Mexican pesos.' That statement is part of microeconomics, because we are talking about the cost in pesos of a single good, namely a dollar." Why is this reasoning INCORRECT?

A shortcoming of using real gross domestic product GDP) as a measure of economic well-being is that it does not measure changes in

Which of the following represents the largest share of U.S. gross domestic product GDP)?

Explain why real gross domestic product GDP) is preferred to nominal GDP as a measure of economic growth.

If over a period of time real gross domestic product GDP) increases while nominal GDP decreases, then this implies