Exam 5: Measuring a Nation's Production and Income

Explain the supply and demand of products, factors of production, and the payments for the products and factors of production as described in the circular flow diagram.

Which of the following is an example of a consumption expenditure?

Macroeconomics

Gross investment is

From 1948 to 2010, the United States has experienced only 4 recessions.

Recall the Application about the link between happiness and GDP to answer the following question(s). Comparing changes in happiness to changes in per capita income over the last 30 years, economists at Dartmouth College and Warwick University have measured levels of happiness in the United States and United Kingdom based on income levels, ethnicity, age, and gender. -GDP ignores all of the following EXCEPT

Macroeconomics is the study of individual economic markets.

Which of the following is NOT a component of private investment, for purposes of GDP accounting?

Use the following information to answer the next several questions: Scenario 1: Imagine that an economy produces two goods, flashlights and fishing lures. In 2011, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. In 2012, the economy produced 85 flashlights and 50 fishing lures, and the prices of flashlights and fishing lures were $7 and $15, respectively. -Based on the information in Scenario 1, nominal GDP in 2012 in this economy was

Fluctuations in economic performance is one of the two basic issues of macroeconomics. The other is

Nominal GDP measures the value of goods and services using current-year prices.

Nominal GDP uses current year prices to measure GDP.