Untitled Flashcards Set

Consumption in the United States is about ___ of GDP.

68%

What four components are added together in the demand measure of GDP accounting?

Consumption, investment, government purchases, and trade balance.

Which items are most likely classified as consumer durable goods?

Automobiles, furniture.

If Gross Domestic Product equals $1.2 trillion and consumption equals $690 billion, investment equals $200 billion, and government spending equals $260 billion, what is the trade balance?

Imports exceed exports by $50 billion.

The value of what businesses provide to other businesses is captured in the final products at the end of the ___ chain.

Production.

To avoid double counting in GDP calculation, statisticians count the ___.

Final goods and services.

Which transaction is included in the calculated Gross Domestic Product?

A local ice cream store sells $17,000 worth of cones and sundaes on July 1.

What is not included in GDP?

Cash income paid to a day laborer that is not reported to the tax authorities.

___ are now the largest single component of the supply side of GDP, representing over half of GDP.

Services.

To compare the GDP of two different countries with different currencies, it is necessary to use ___.

An exchange rate.

What does GDP not directly include?

The value of intermediate goods sold during a period.

Investment (I) includes what?

The amount spent on new factories and machinery.

What does a business cycle reflect?

Changes in economic activity, particularly real GDP.

What are the stages of a business cycle?

Expansion, peak, recession, trough.

What is true regarding real world business cycles?

The expansions and contractions last varying lengths of time and often differ in magnitude.

If imports exceed exports, what exists?

A trade deficit.

___ determines the prevailing standard of living in a country.

Economic growth.

Once every ___, the Census Bureau conducts a comprehensive survey of housing and residential finance.

10 years.

What is the difference between nominal GDP and real GDP?

Real GDP adjusts for inflation.