ECON102 Study Guide - Comprehensive Midterm Guide: Gross Domestic Product, Frictional Unemployment, Real Wages

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magentaporcupine258

5 Oct 2016

School

University of Waterloo

Department

Economics

Course

ECON102

Professor

Joseph Dejuan

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ECON102 Full Course Notes

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Chapter 20 measuring gdp and economic growth. Gross domestic product (gdp) is the market value of all nal goods and service produces in a country in a given time period. This de nition has 4 parts: market value goods and services are valued at their market prices. The price is a way to value and compare all goods/services: final goods and services a nal good or service is an item bought by is nal user during a speci ed time period. A nal good contrasts with an intermediate good, which is an item that is produced by one rm, bought by another, and used as a component of a nal good or service. Does not matter the nationality of the person who produced it. If it is produced in canada, it goes into our gdp: in a given time period normally a year or a quarter of a year.

Related Questions

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.

chocolateant769

1. In the actual economy, households

a. spend all of their income.

b. divide their income among spending, taxes, and saving.

c. buy all goods and services produced in the economy.

d. Both (a) and (c) are correct.

2. Gross domestic product is defined as

a. the quantity of all final goods and services demanded within a country in a given period of time.

b. the quantity of all final goods and services supplied within a country in a given period of time.

c. the market value of all final goods and services produced within a country in a given period of time.

d. Both (a) and (b) are correct.

3. GDP adds together many different kinds of products into a single measure of the value of economic activity by using prices determined by

a. banks.

b. economists.

c. the government.

d. markets.

4. Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has

a. caused measured GDP to fall.

b. not caused any change in measured GDP.

c. caused measured GDP to rise.

d. probably changed measured GDP, but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted.

5. A steel company sells some steel to a bicycle company for $150. The bicycle company uses steel to produce a bicycle, which it sells for $250. Taken together, these two transactions contribute

a. $150 to GDP.

b. $250 to GDP.

c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle.

d. $400 to GDP.

6. The total sales of all firms in the economy for a year

a. equals GDP for the year.

b. is larger than GDP for the year.

c. is smaller than GDP for the year.

d. Any of the above is possible.

7. GDP is equal to

a. the market value of all final goods and services produced within a country in a given period of time.

b. Y.

c. C + I + G + NX.

d. All of the above are correct.

8. The consumption component of GDP includes spending on

a. durable goods and nondurable goods, but not spending on services.

b. durable goods and services, but not spending on nondurable goods.

c. nondurable goods and services, but not spending on durable goods.

d. durable goods, nondurable goods, and services.

periwinkletoad580

Which of the following is included in U.S. GDP?

i) the rental value of homes owned by U.S. citizens.

ii) the production of Suburban SUVs by GM in its plant in Mexico.

iii) Tickets sold by U2 for concerts held in the United States.

A) ii only.

B) ii and iii.

C) i, ii and iii.

D) i and iii.

E) i only.

Which of the following is NOT directly included in Canadian GDP?

A) The purchase of tickets to a Kanye West concert in Montreal.

B) The sale of tickets to the Vancouver Oympics to U.S. citizens.

C) Gasoline purchased by a tour bus operator in Quebec.

D) Bus tickets sold to tourists for a tour bus ride in Montreal.

E) All of the items would be included in Canadian GDP.

Which of the following is classified as a final good or service?

i. tires bought by GM to put on new Tahoes

ii. mustard bought by Subway to put on its sub sandwiches

iii. your purchase of online access to the Wall Street Journal

A) i and ii.

B) i, ii and iii.

C) iii only.

D) ii and iii.

E) ii only.

Which of the following correctly describes a final good?

i) A final good is bought by its final consumer.

ii) A final good can be used by a firm as a component of another good or service.

iii) Investment goods cannot be a final good.

A) i only.

B) i and ii.

C) i, ii and iii.

D) i and iii.

E) ii and iii.

A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is

A) a consumption expenditure.

B) an investment.

C) an intermediate good.

D) an example of government expenditures on goods and services.

E) part of net exports if the fish was caught beyond the U.S. border.

Which of the following is classified as an intermediate good?

i) the purchase of a Big Mac by a college student

ii) McDonald's purchase of pickles

iii) a McDonald's restaurant owner's interest payment for the loan on her building.

A) ii only.

B) ii and iii.

C) i only.

D) i and iii..

E) i, ii and iii.

Which of the following would NOT be directly included in the U.S. GDP in 2010?

A) the market value of restaurant meals sold in 2010

B) the market value of the jet fuel bought by Delta to use for its flights in 2010

C) the value of the automobiles produced in 2010 at the Toyota plant located in Georgetown, KY

D) legal services provided to first time home buyers during 2010

E) the purchase of a new home in Atlanta, Georgia in 2010

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ECON102 Study Guide - Comprehensive Midterm Guide: Gross Domestic Product, Frictional Unemployment, Real Wages

ECON102 Full Course Notes

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