ECN 2025 Lecture Notes - Lecture 5: Gross Domestic Product, Aggregate Supply, Aggregate Demand

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yellowcattle191

14 Jun 2017

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Gross domestic product (gdp) measures the value of all final goods and services produced within a nation"s borders. Which of the following is not the proper subject matter for macroeconomics? the price of corn. Which of the following is a stock variable? the money supply. If firms expect greater demand for their products, invest in more capital and hire more labor their behavior may encourage the very prosperity that they expect. If all firms expect greater demand for their products or services, they will hire __________ resources (e. g. , labor and capital) and the economy will experience __________. more; growth. Economic fluctuations (or business cycles) are fluctuations in the level of economic activity as measured by real gdp, relative to a long- term growth trend. In u. s. history, recessions have usually lasted longer than expansion periods. The u. s. economy has experienced alternating periods of expansion and contraction in economic activity relative to its long-term growth trend in the economy.

Related Questions

*********The best answer plus points will go to the person who answers the questions correctly^^^^^ Please provide an explanation to answers..

Which one of the following statements is correct?

A. A. Most production possibilities curves illustrate decreasing marginal opportunity costs.

B. B. Relative scarcity is no longer a central idea in economics because we are in an age of abundance.

C. C. The production possibilities curve shows society's preferences for consumer goods relative to capital goods.

D. D. The central concept underlying the production possibilities curve is that of limited resources.

A government subsidy to the producers of a product:

A. A. reduces product supply.

B. B. increases product demand

C. C/ increases product supply.

D. D/ reduces product demand.

If the price of DVD players decreases, we can expect that the demand for DVDs will:

a. A. increase.

b. B. be unaffected.

c. C/ shift left.

decD. Decrease

Which of the following is assumed in constructing a typical production possibilities curve?

a. the economy is engaging in international trade.

b. production technology is fixed.

c. the economy is using its resources inefficiently.

d. resources are perfectly shiftable (equally efficient) among alternative uses.

A system of private property rights

A. A.enhances economic growth by creating incentives to the Fed to maintain stable prices.

B. B. enhances economic growth by increasing the probability that a person can gain from making investments today.

C. C. retards economic growth by serving the interests of the wealthy only.

D. D. retards economic growth by limiting the options of people who own nothing.

An increase in growth rates will cause the production possibilities curve to

a. A. shift inward.

b. B. become steeper.

c. C. become flatter.

D. d. shift outward.

If population growth is greater than the growth of real output,

A. A. real per capita Gross Domestic Product (GDP) growth will be less than the growth of real Gross Domestic Product (GDP).

B. B. the production possibilities curve is shifting to the left.

C. C. real per capita Gross Domestic Product (GDP) growth will be greater than the growth of real Gross Domestic Product (GDP).

D. D. real per capita Gross Domestic Product (GDP) and real Gross Domestic Product (GDP) will be growing at the same rate.

In general, economists have found that as nations' levels of per capita real Gross Domestic Product (GDP) increase,

A. A. the rate of population growth declines.

B. B. the rate of population growth experiences dramatic increases.

C. C. there is no effect on population growth.

D. D. the rate of population growth increases at the same rate as economic growth.

1) According to new growth theory,

A) physical capital is nonexcludable.

B) knowledge capital is excludable.

C) knowledge capital is subject to increasing returns.

D) knowledge capital is rival and excludable.

2) Knowledge capital is nonrival in the sense that

A) two people can use the same knowledge to develop and produce a product.

B) firms do not compete to be the first to develop new technologies.

C) no single company can be excluded from the benefits of new technologies.

D) firms can benefit from the research and development of rival firms without paying for that

benefit.

3) Which of the following government provisions would help increase the accumulation of knowledge capital?

A) patents

B) copyrights

C) education subsidies

D) All of the above are correct.

4) Which of the following government policies would most likely result in an increase in economic growth?

A) a decrease in the life of a patent from 20 years to 15 years

B) a decrease in the interest rate at which the government provides student loans

C) a decrease in government spending on grants issued through the National Institutes of Health

D) decreased copyright protection on music and movies

5) Creative destruction means that

A) firms develop new products that replace old products in the economy, thereby encouraging

economic growth.

B) economic growth can only be sustained if capital depreciates rapidly.

C) knowledge capital can be created through a system of government subsidies for education and research and development.

D) research and development should only be financed if research and development are incremental (a result of making small changes to existing products).

6) Which of the following explains the ability of the U.S. economy to avoid diminishing marginal returns and experience accelerating growth in the early to mid-20th century?

A) continuing technological change

B) immigration

C) additions of a greater amount of capital of the same quality

D) a decrease in the quality of labor

7) By offering more generous unemployment insurance programs, European countries can expect

A) to pay less in taxes than in the United States.

B) workers to gain new skills quickly in response to fluctuations in the labor market.

C) shorter periods of unemployment for their workers.

D) longer periods of unemployment for their workers.