Exam 5: Introduction to Macroeconomics

A business cycle is

The rental income component in the income approach to calculating GDP includes the incomes of real estate agents and brokers.

What impact will a rising price level have on real GDP?

The simple circular flow diagram shows that economic aggregates can be calculated either by the _____ flows in the product market or by the _____ flowing to households in the resource market.

Suppose the Chicago Fed National Activity Index increased from -0.52 in April to -0.30 in May. Use this information to describe the conditions present in the economy in April and May and speculate about the probability of a recession in the near future.

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

In a simple circular flow diagram, total spending on goods and services in the product market

GDP measures the final value of goods and services produced to avoid the problem of

Current national income and production statistics include the environmental benefits or harm of economic activity.

The four types of spending in GDP are personal consumer spending, _____ private domestic investment, government spending, and _____.

In 2014, we could accurately say that the Leading Economic Index successfully predicted the past seven recessions.

Suppose the Department of Homeland Security purchases a computer to improve the productivity of its workers. Which spending category in the national income and product accounts would this purchase fall under?

Personal consumption expenditures are goods and services purchased by residents of the United States.

The idea that all income ultimately goes to households, which then use it to buy goods and services from firms, is a central idea of the

Suppose the Chicago Fed National Activity Index decreased from +0.27 in November to +0.02 in December. Use this information to describe the conditions present in the economy in November and December and speculate about the probability of a recession in the near future.

The economy is probably heading into a recession when the National Activity Index equals

The effects of the informal economy are all negative.

Describe the business cycle using real GDP as the measure of aggregate economic activity. Illustrate the business cycle with a graph.

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.