Chapter 9

Question 1

What is per capita GDP?

Answer 1

GPD - population

Question 2

An increase in real GDP is an

Answer 2

expansion

Question 3

A decrease in real GDP is a

Answer 3

contraction

Question 4

Economic Growth

Answer 4

percent change in real GDP

Question 5

Recession

Answer 5

two successive quarters of negative economic growth

Question 6

Real GDP

Answer 6

what GDP would be if prices had remained the same as they were in the base year

Question 7

Income Approach

Answer 7

adds up all the factors of production

Question 8

Expenditure Approach

Answer 8

add up current market values of all final goods and services

Question 9

GDP tells…

Answer 9

how big an economy is

Question 10

GDP

Answer 10

current market value of all goods and services produced within the countries borders in one year

Question 11

Final Goods

Answer 11

those sold to a final user

Question 12

Intermediate Goods

Answer 12

those not sold to a final user

Question 13

Free Markets work to…

Answer 13

maximize wealth of nations through value creation

Question 14

T/F Wealth and income are the same thing

Answer 14

FALSE. Wealth is a stock of what you owe.

Income is flow that reflects value creation.

Question 15

4 Components of expenditure approach

Answer 15

Investment, consumption, net exports, government purchases

Question 16

What is the best way to determine if a country is getting better or worse by looking at a single number?

Answer 16

Economic Growth