Macroeconomics Sapling Ch. 5 - Assignment Essays

question

Which of the following statements is the best description of a business cycle?

answer

Alternating period of increasing and decreasing economic output

question

The peak of a business cycle is followed by a downturn or recession.

answer

True

question

Business cycles can be described as fluctuations from the economy's long-term growth trend.

answer

True

question

The four phases of business cycles are peaks, troughs, expansions, and recessions.

answer

True

question

Business cycles are common in emerging economies but not in developed economies.

answer

False

question

When a business cycle reachers the trough, the economy is usually operating at its capacity.

answer

False

question

Business cycles last for approx. nine months.

answer

False

question

Identifies recessions with a considerable lag, making it less useful for designing policy.

answer

Business Cycle Dating Committee

question

Uses updated or revised information to determine phases of the business cycle.

answer

Business Cycle Dating Committee

question

Does a good job in identifying recessions in the current time frame

answer

National Activity Index

question

Established by the Federal Reserve Bank of Chicago

answer

National Activity Index

question

Uses a weighted average of over 80 economic indicators to identify business cycle trends

answer

National Activity Index

question

When the National Activity Index is negative, this means that the economy is growing

answer

Slower than long-term economic growth

question

When the NAI is equal to zero infers that the economy is growing

answer

on pair with long-term economic growth

question

When the NAI is positive this means that the economy is growing

answer

faster than long-term economic growth

question

Businesses ______ and ________ whereas households ______ and _______.

answer

Sell products, buy resources; buy products, sell resources

question

For a good or service to be counted in a given year's gross domestic product (GDP), what four following criteria must be met?

answer

Have a market value, be a final good or service, be produced within a given country, and be produced within a certain time frame

question

Included in GDP:

answer

A new skateboard you buy for your niece, the commission paid to the seller of a previously owned collectors skateboard, and a new building for Tony Hawk Industries

question

Not included in GDP b/c of double counting:

answer

Wheels used to produce a skateboard that will be sold new, a used copy of the Tony Hawk video game, a used skateboard you buy for your brother, a previously owned collectors skateboard, and a ticket for the X Games bought from a person on a street corner

question

Included in the GDP of the U.S:

answer

Honda's assembly and sale of cars in the US and Old Navy purchases mannequins to display clothes

question

NOT Included in the GDP of the U.S:

answer

Sale of wheat to Mrs. Baird's Bakery, resale of used textbooks to college students, GM's assembly and sale of cars in Mexico, and Ocean Spray purchases plastic to make bottles

question

If we are considering just the U.S., how are GDP and GNP related?

answer

GDP= GNP - (output of U.S. citizens living abroad) + (output of foreign nationals living in the U.S.)

question

Consumption:

answer

Ice cream, a domestically manufactured personal computer, cab fare for personal use, 55 cent tacos, and a Super Bowl ticket bough new from the NFL

question

Investment:

answer

A domestically manufactured business computer

question

Government:

answer

A public school teacher's salary

question

Net Exports:

answer

An exported dollhouse

question

GDP Formula:

answer

GDP = C + I + NX + G

question

Total household income:

answer

Personal income

question

Disposable personal income:

answer

After-tax income

question

(After-tax income - Consumption) > 0

answer

Personal savings

question

National income - Personal income

answer

Retained earnings

question

(After-tax income - Consumption) < 0

answer

Dissavings

question

Real GDP per capita is NOT an adequate measure of _______:

answer

the well-being of each person in an economy

question

In what way does GDP not give an accurate representation of standard of living?

answer

GDP does not account for how people distribute their time between work and leisure, GDP doesn't account for changes in environmental quality, and GDP does not measure production that occurs outside of the market economy.

1 of 34

question

Which of the following statements is the best description of a business cycle?

answer

Alternating period of increasing and decreasing economic output

question

The peak of a business cycle is followed by a downturn or recession.

answer

True

question

Business cycles can be described as fluctuations from the economy's long-term growth trend.

answer

True

question

The four phases of business cycles are peaks, troughs, expansions, and recessions.

answer

True

question

Business cycles are common in emerging economies but not in developed economies.

answer

False

question

When a business cycle reachers the trough, the economy is usually operating at its capacity.

answer

False

question

Business cycles last for approx. nine months.

answer

False

question

Identifies recessions with a considerable lag, making it less useful for designing policy.

answer

Business Cycle Dating Committee

question

Uses updated or revised information to determine phases of the business cycle.

answer

Business Cycle Dating Committee

question

Does a good job in identifying recessions in the current time frame

answer

National Activity Index

question

Established by the Federal Reserve Bank of Chicago

answer

National Activity Index

question

Uses a weighted average of over 80 economic indicators to identify business cycle trends

answer

National Activity Index

question

When the National Activity Index is negative, this means that the economy is growing

answer

Slower than long-term economic growth

question

When the NAI is equal to zero infers that the economy is growing

answer

on pair with long-term economic growth

question

When the NAI is positive this means that the economy is growing

answer

faster than long-term economic growth

question

Businesses ______ and ________ whereas households ______ and _______.

answer

Sell products, buy resources; buy products, sell resources

question

For a good or service to be counted in a given year's gross domestic product (GDP), what four following criteria must be met?

answer

Have a market value, be a final good or service, be produced within a given country, and be produced within a certain time frame

question

Included in GDP:

answer

A new skateboard you buy for your niece, the commission paid to the seller of a previously owned collectors skateboard, and a new building for Tony Hawk Industries

question

Not included in GDP b/c of double counting:

answer

question

Included in the GDP of the U.S:

answer

Honda's assembly and sale of cars in the US and Old Navy purchases mannequins to display clothes

question

NOT Included in the GDP of the U.S:

answer

Sale of wheat to Mrs. Baird's Bakery, resale of used textbooks to college students, GM's assembly and sale of cars in Mexico, and Ocean Spray purchases plastic to make bottles

question

If we are considering just the U.S., how are GDP and GNP related?

answer

GDP= GNP - (output of U.S. citizens living abroad) + (output of foreign nationals living in the U.S.)

question

Consumption:

answer

Ice cream, a domestically manufactured personal computer, cab fare for personal use, 55 cent tacos, and a Super Bowl ticket bough new from the NFL

question

Investment:

answer

A domestically manufactured business computer

question

Government:

answer

A public school teacher's salary

question

Net Exports:

answer

An exported dollhouse

question

GDP Formula:

answer

GDP = C + I + NX + G

question

Total household income:

answer

Personal income

question

Disposable personal income:

answer

After-tax income

question

(After-tax income - Consumption) > 0

answer

Personal savings

question

National income - Personal income

answer

Retained earnings

question

(After-tax income - Consumption) < 0

answer

Dissavings

question

Real GDP per capita is NOT an adequate measure of _______:

answer

the well-being of each person in an economy

question

In what way does GDP not give an accurate representation of standard of living?

answer

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