EC140 Chapter Notes - Chapter 19: Grater, Unemployment, Business Cycle

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Measure of the quanity of total produced output by a single naion in a one year period. The producion of goods and services leads to income. Nominal naional income= value of naional output at exising prices, there is no inlaion adjustment. Real naional income= calculated on prices of a base year. Potenial gdp is the amount of goods and services/ income that a country could be producing/receiving if all its resources were fully employed. Actual gdp is the real total amount of goods and services produced. The diference between potenial (y*) and actual (y) gdp is known as the output gap. States of the economy depending on the rate of growth in an economy. The economy is in maximum state of producion. There is low unemployment, high wages and output equal or above y* The peak is followed by a trough where there are unemployed resources, a decrease in output which is now under y*

Related Questions

Gross Domestic Product (GDP) only measures the value of marketed goods and services for a country during a given period of time.

Is the GDP measure underestimating or overestimating national production and total income in the economy? Why?

What are the limitations of the GDP in measuring total output and national welfare? What products (services) are excluded from the GDP computation?

ambergnu461

GDP can increase at a faster rate than real GDP:

a. only if there is a decline in the price level.

b. only if the unemployment rate is increasing.

c. only if the value of the dollar is stable.

d. only if the population is growing.

e. only if there is inflation.

If our output of goods and services rises, then:

a. real GDP definitely rose.

b. real GDP definitely fell.

c. GDP definitely rose.

d. GDP definitely stayed the same.

Assume that from 2007 to 2009 the U.S. economy experiences inflation. Also, assume that GDP remains constant from 2007 to 2009. Therefore:

a. real GDP rises.

b. real GDP falls.

c. there is no change in real GDP.

d. no conclusion can be reached as to whether real GDP rises, falls, or remains the same.

Which of the following statements is true?

a. GDP is greater than national income, which is greater than NDP.

b. Government spending is the largest sector of GDP.

c. A Social Security check sent to a retiree is counted as part of GDP.

d. The purchase of a new factory is counted in the investment sector of GDP.

The GDP is the value of all final goods and services produced:

a. within the nations boundaries.

b. by domestically owned companies.

c. by citizens of the country.

d. by domestically controlled companies.

National Income is about _____ percent of GDP.

An improvement in technology causes the production possibilities frontier (PPF) to

	shift to the right.
	pivot upward.
	shift to the left.
	pivot downward.

(7)

Which of the following is not shown by the circular flow model?

	The flow of resources in one direction and money in the other
	The equality of aggregate spending and aggregate income
	The interaction of households, firms, and the government
	The total amount of goods and services the economy can produce

(8)

Gross domestic product (GDP) is defined as

	the market value of all final goods and services produced in an economy in a given period of time.
	the market value of all consumption goods and services produced in an economy in a given period of time.
	the market value of all investment goods and services produced in an economy in a given period of time.
	the real value of all investment goods and services produced in an economy in a given period of time.

(9)

Real GDP

	includes all domestic and foreign transactions.
	includes the dollar value of domestic transactions only.
	tries to isolate the effect of changing output, holding prices constant.
	measures GDP in terms of prices of goods and services produced.

(10)

When economists talk about economic growth, they are usually referring to

	the percentage change in nominal GDP.
	the percentage change in real GDP.
	the percentage change in nominal investment.
	the percentage change in real investment.

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EC140 Chapter Notes - Chapter 19: Grater, Unemployment, Business Cycle

EC140 Full Course Notes

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