TRUE or FALSE?
1. Real GDP can never be greater than potential GDP.
2. When foreign countries experience an increase in income, this is likely to increase our GDP.
3. The United States economy spends about as many months in recession as it spends in expansion.
4. If individuals decrease their consumption spending then this is likely to reduce the growth rate of GDP, all else the same.
5. Movements of real GDP around potential GDP are called the business cycle.
6. If total government spending in a given year was $3.7 trillion, then all of this spending counted directly in GDP as part of the government spending (G) category.
7. The last recession in the United States began in December of 2007.
8. During a recession, the inflation rate tends to decline.
9. Changes in spending that cause firms to change their level of production of goods/services are called supply shocks.
10. All else the same, an increase in income in the United States leads to a decrease in our net exports.
11. Since 1929 there have been 14 declared recessions in the United States.
12. Total spending in the economy is equal to consumption + investment + government spending - net exports.
13. During each recession, potential GDP falls.
14. Percentage wise, the government collects more tax from individuals than it does from firms.
15. During a recession, the Federal Reserve pursues contractionary monetary policy.
16. During a recession, the Federal Reserve is most likely to sell government bonds to the public.
17. Investment spending increases during periods of recession.
18. Congress meets about every 6 - 8 weeks to discuss the performance of the economy and potential changes to fiscal policy.
19. If there is more competition among firms, then the inflation rate will tend to increase.
20.The demand for labor increases when the economy is in an expansionary phase.
21. Total spending by the government is about 20% of GDP in the US economy.
22. The unemployment rate decreases during periods of expansion.
23. If oil prices increase by 20% then this is an example of a supply shock.
24. When the Federal Reserve buys government bonds, interest rates are likely to fall.
25. If Congress wanted to help the economy out of a recession, they would be most likely to reduce government spending and/or increase taxes.
Falsenot in accordance with the fact or reality or actualityMore (Definitions, Synonyms, Translation)
