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Econ 201- Exam Two Questions Ans Accurate Answers
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Econ 201- Exam Two Questions Ans Accurate AnswersGross domestic is the sum ______ produced within a country in a given time period. -
Answer market value of all final goods and services
Real GDP as a measure of economic welfare can be criticised because it: - Answer
.does not account for the degradation of environmental quality
.includes neither the value of products produced in the household
.includes leisure time available to society
all of the above are correct
Economists distinguish real GDP from nominal GDP to - Answer determine whether real
production has changed
When calculating GDP, underground economic activity is - Answer the part of the
economy purposely hidden
GDP declines during - Answer the movement from peak to trough
Base-year method of calculating real GDP The base-year method of calculating real
GDP compared Answer quantities produced in different years using prices from a year
chosen as a reference period
Potential GDP is Answer the value of production when all the nation's resources are fully
employed
If Nike, an American corporation, produces sneakers in Thailand this would Answer add
to Thailand's GDP but not to US GDP
, What is not an indirect tax? - Answer income taxes
Business Cycles - Answer follow a pattern of trough, expansion, peak and recession
What is not part of the expenditure approach to measuring GDP? - Answer net interest
Personal consumption expenditures does not include - Answer new housing
What is not included in gross domestic investment expenditure - Answer business's
purchase of another company's stock
Which of the following is a reason why intermediate goods are not included in GDP?
Answer: Because their inclusion would involve double counting
Depreciation is best described as - Answer decline in the stock of capital because of
wear and tear
The biggest component of GDP according to the expenditures approach is - Answer
personal consumption expenditures
Which of the following does not form part of real GDP? - Answer production in the home
Net investment is equal to - Answer gross investment minus depreciation
Depreciation is subtracted from gross domestic product to determine directly - Answer
net domestic product
When using the income approach to measure GDP, the largest share of GDP generally
consists of: - Answer labor income
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