question
The expenditure approach to calculating GDP estimates annual spending on each of the following EXCEPT:
A. Consumer goods/services
B. Business goods/services
C. Government goods/services
D. Imported goods/services
A. Consumer goods/services
B. Business goods/services
C. Government goods/services
D. Imported goods/services
answer
D. Imported goods/services
question
Each of the following would be counted toward GDP EXCEPT:
A. Betsy Johnson shoes made in Austin
B. A four count chicken strip meal sold at Chick-fil-a in San Diego
C. Pillowcase dresses made by IWA girls for girls in Honduras
D. Cars made in Alabama by the German company Mercedes
A. Betsy Johnson shoes made in Austin
B. A four count chicken strip meal sold at Chick-fil-a in San Diego
C. Pillowcase dresses made by IWA girls for girls in Honduras
D. Cars made in Alabama by the German company Mercedes
answer
C. Pillowcase dresses made by IWA girls for girls in Honduras
question
Dividing GDP by the number of people in a country yields ___
answer
Per capital GDP
question
What are intermediate goods?
answer
Goods used in the production of other goods
question
What is the underground economy?
answer
The products and income that are not reported as income to the government
question
What is the different between real GDP and nominal GDP?
answer
Real GDP takes inflation into account; nominal GDP is the current year's price
question
What happens to the percentage of an income that is taxed when income rises and the tax is a proportional tax?
answer
The percentage of tax stays the same
question
How would you describe a tax that is assessed according to the benefits-received principle?
answer
Only those who receive the money/program provided by the tax should pay for the tax
question
The central idea of classical economists is ___
answer
Free markets regulate themselves
question
What are the two main economic problems that Keynesian economics is wrong?
answer
Periods of recession and inflation
question
Which of the following is NOT a reason why fiscal policy is difficult to enact?
A. There is usually a lag in first recognizing problems in the economy
B. Most of the budget goes to military spending, which can't be changed
C. Raising taxes and cutting spending are politically unpopular
D. Different states may require different fiscal policy actions
A. There is usually a lag in first recognizing problems in the economy
B. Most of the budget goes to military spending, which can't be changed
C. Raising taxes and cutting spending are politically unpopular
D. Different states may require different fiscal policy actions
answer
B. Most of the budget goes to military spending, which can't be changed
question
What is the largest category of federal mandatory spending?
answer
Social security
question
How is the federal income tax a progressive tax?
answer
The higher the income a person has, the higher the percentage that person pays in tax
question
In a recession, the government should do what two things?
answer
Increase spending and decrease taxes
question
The idea that every dollar of change in government use of money is reflected in a greater change in the economy is the _____
answer
Multiplier effect
question
Fiscal procedures that try to decrease economic output are ___
answer
Contractionary policies
question
income, property, good, or service that is subject to a tax?
answer
Tax base
question
Government spending program that automatically changes in response to changes in GDP or income
answer
Automatic stabilizer
question
Form used to file income taxes
answer
Tax return
question
Taxes that fund social security and medicare
answer
Payroll taxes
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