Exam 11: Measuring Macroeconomic Activity

The rising phase of a business cycle measured by an increase in real GDP is called:

GDP can increase from one year to the next by:

Inflation was a problem during the Great Depression.

When shopping the consumer is interested in absolute prices.

The falling phase of a business cycle measured by a decrease in real GDP is called:

The income generated from the sale of the goods and services produced in the economy and paid to the individuals and businesses who supply the factors of production is called:

An economy with both a private and public sector is called:

In a closed economy firms sell goods and services to:

The producer price index focuses on price changes of domestically produced goods and includes services,construction,and imported goods.

Table 11.1 -Refer to Table 11.1.What is the value of personal consumption expenditures?

The price of one currency in terms of another is called an exchange rate.

The labor force includes discouraged workers.

The level of aggregate output and income where there is a balance between spending and production decisions and where the economy moves toward is called:

U.S.GDP excludes underground activities.

Personal income less personal taxes is called:

The unemployment rate is calculated as follows:

Many financial analysts use GDP as a measure of the economy's performance.However,GDP has several shortcomings in terms of measuring economic well-being.State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.

The level toward which the economy is moving and where it will stay unless spending patterns of the economy will change is called the equilibrium level of output and income.

In recent years,U.S.exports have exceeded U.S.imports.

GDP may be computed using the expenditure or value-added approaches.