sectors of the economy. B) Compare the value of output of one period with that of another. C) Provide an index to measure the rate of inflation. D) All of the above. Answer: D Type: Basic Understanding Page: 93 3. The GDP is: A) C + I + G + (X - IM). B) The sum of value added at every stage of the production process. C) The total market value of final goods and services. D) All of the above. Answer: D Type: Definition Page: 93 4.
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Consumption is the largest GDP component in the economy, including of private expenditures in the economy, household final consumption expenditure. These personal expenditures fall under one of the following categories: durable goods, nondurable goods, and services. Such as, food, rent, jewelry, gasoline, and medical expenses, but not the purchase of new housing. People can also spend it on domestic goods or as savings, when they get their wages. Private consumption expenditure is to measure the
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Macroeconomic Data Gross Domestic Product (GDP) Consumer Price Index (CPI) Unemployment rate Gross Domestic Product: Expenditure and Income Two definitions: Total expenditure in goods and services produced in a country Total income earned by productive factors in a country Expenditure equals income, since each dollar/euro spent by a consumer, is also the income of a producer Circular flow in the Economy Income Labor Households Firms Goods/Services Expenditure Value Added Value added of
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Introduction: GDP is the total market value of all final goods and services produced in a country in a given year.GDP can be stated in two forms: Current price and constant price. Nominal GDP or GDP at current measures the value of output of a given by using the prices of that particular year. Where Real GDP or GDP at constant price shows the value of all output of a given year expressed in base year prices (according to Bangladesh economic review 2010 the base year is consider to be 1995-96). GDP is a key
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allows one to identify the problematic area and helps the ways to fix restore it. GDP and profit currently dominate society’s discussions of economic performance. They shape the way people think about the economy and business, affecting their behavior and the actual outcomes of economic activity. So what is economic success? Going beyond GDP and profit will explore what we mean by economic success, the role that GDP and profit play in this, and the potential for broader measures of economic success
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Cronovich © 2009 South-Western, a part of Cengage Learning, all rights reserved In this chapter, look for the answers to these questions: What is Gross Domestic Product (GDP)? How is GDP related to a nation’s total income and spending? What are the components of GDP? How is GDP corrected for inflation? Does GDP measure society’s well-being? 1 Micro vs. Macro Microeconomics: The study of how individual households and firms make decisions, interact with one another in
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numerical answers). 1. What is Country A’s GDP? GDP = C + I + G + (X - M) G=25,000 C=90,000 I=10,000 X=65,000 M=50,000 GDP= 90,000+10,000+25,000+(65,000-50,000) GDP= 125,000+ (15,000) GDP= $140,000 2. What is the composition of GDP by percentage? 3. What is the GDP per capita? GDP per Capita= GDP/ Population a. GDP Per Capita = 140,000/500,000 b. GDP Per Capita= .28 Part II Go to the Bureau
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and services + Net export A formal measure of the value of the output of an economy is its gross national product, GDP. Gross National Product An economy's annual aggregate output is measured by its GDP or gross domestic product: the total market value of all final goods and services produced within a country over a period of one year. GDP is a monetary measure of the
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| | | |Possible levels |Real domestic | | | |of employment |output (GDP=DI) |Consumption |Saving | |(millions) |(billions) |(billions) |(billions) | | |
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current macroeconomic situation for the economy of Albernia. You have been hired as an economic consultant to help the economy move to potential output, YP. Aggregate price level LRAS SRAS P1 E1 AD1 Y1 YP Potential output Real GDP a. Is Albernia facing a recessionary or inflationary gap? b. Which type of fiscal policy—expansionary or contractionary—would move the economy of Albernia to potential output, YP ? What are some examples of such policies? c. Illustrate the macroeconomic
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