Exam 5: Introduction to Macroeconomics

Which statement is TRUE within the circular flow of economic activity?

Most frozen foods are considered durable goods.

Gross private domestic investment is about 20% of GDP.

What component of U.S. GDP is usually negative in boom years?

Holding other expenditures constant, if imports fall by $20 billion and exports fall by $10 billion, then GDP

Using the income approach to calculating GDP, economists sum all incomes earned by owners of factors of production. What three adjustments must be made to convert national income to GDP?

The income approach to measuring GDP involves adding the incomes earned by owners of all factors of production.

We should MOST likely expect a recession if the Leading Economic Index _____ months in a row.

When Andrea was a poor college student, she changed the oil in her car herself. Now that she has a job, she takes her car to her mechanic to have the oil changed. GDP is not affected by this change.

Which item is NOT a category of personal consumption expenditures?

Total spending in an economy is the sum of

Government expenditures include _____ and _____ but NOT _____.

Net exports equal

Which is NOT a criticism of the National Bureau of Economic Research's recession dating?

Business cycles are alternating increases and decreases in macroeconomic activity.

Which activity is an example of a nonmarket transaction?

The U.S. median household income in 2018 was about $60,000.

(Table Macroeconomic Data for Econoland) Look at the table. Which time period covers one complete business cycle with no duplicate stages?

(Table) Look at the table of data for two countries; which country is likely to grow more rapidly?

Compensation of employees in the income approach to calculating GDP includes many benefits, such as employers' contributions to unemployment compensation.