Exam 6: Up Around the Circular Flow: Gdp, Economic Growth, and Business Cycles

During the first three quarters of 2015, real GDP went from $200 to $220 to $180. Economists describe the second quarter of 2015 as a(n)

Non-market production includes household activities like cleaning, cooking and child care.

Legalizing marijuana will cause real GDP to decrease.

Real GDP overestimates well-being because it does not include the value of leisure time.

In Gagaland, real GDP is $160 billion and potential GDP is $200 billion. Gagaland has a(n)

If Canada has an annual average growth rate of 2 percent, and China has an annual growth rate of 5 percent, it will take Canada 21 more years than China to double real GDP per person.

If underground economic activities were included in real GDP calculations, measured real GDP levels would be higher.

The sum of all value added equals the value of all intermediate products and services.

How much does the production of a kayak add to GDP if the shell costs $250, the paint costs $20, the finisher costs $35, the manufacturer sells it to the dealer for $500, and the dealer sells it to her customer for $800?

In 2015, Adanac produced 20 kilos of apples and 30 kilos of bananas. Both fruits were used only for final consumption and nothing else was produced. In 2015, a kilo of apples sold for $5 while a kilo of bananas sold for $10. In 2016, Adanac produced only 10 kilos of apples but produced 40 kilos of bananas. Prices in 2016 were $6 per kilo of apples and $11 per kilo of bananas. The economic growth rate in real GDP between 2015 and 2016 was ________ percent.

Business cycles are fluctuations of real GDP around potential GDP.

In a recessionary gap, policymakers may try to increase real GDP.

The lowest point of a contraction is called a recession.

The quality of labour inputs increases through training and education.

In 2015, Adanac produced 20 kilos of apples and 30 kilos of bananas. Both fruits were used exclusively for final consumption and nothing else was produced. In 2015, a kilo of apples sold for $5 while a kilo of bananas sold for $10. In 2016, Adanac produced only 10 kilos of apples but produced 40 kilos of bananas. In 2016, prices were $6 per kilo of apples and $8 per kilo of bananas. Using 2015 prices, economists estimate that potential GDP is $400 in 2016. The output gap in 2016 is

Potential GDP is the same as full employment GDP.

The difference between the value of a business's output and the value of intermediate products and services bought from other businesses equals

When real GDP is below potential GDP the economy is experiencing an inflationary gap.

Economic growth rates in industrialized countries were highest in which period?

The United Nations Human Development Index is a measure of