Final Exam (Macroeconomics)

Question 1

Macroeconomics

Answer 1

the study of economics from the perspective of a country

Question 2

Purpose of Macroeconomics

Answer 2

Promote Prosperity and Avoid Decline

Question 3

GDP

Answer 3

• Gross Domestic Product
• indicator of the economic prosperity of a country
• the sum of the value of all the goods and services generated in a country over a year (typically)

Question 4

Expenditure Method
GDP Formula

Answer 4

C + G + I + Net Exports (Ex - Im)

Question 5

C

Answer 5

Private Consumption

Question 6

G

Answer 6

Government Spending

Question 7

I

Answer 7

Investment

Question 8

Income Method (GDP i)

Answer 8

The sum of income generated from the sale of goods and services (includes profits, wages, interest earned, and rents.)

Question 9

Real GDP

Answer 9

term used to describe GDP after factoring out inflation impacts

Question 10

GDP is a measure of (productivity/wealth)

Answer 10

PRODUCTIVITY

Question 11

Aggregate Supply and Demand

Answer 11

Supply curve that indicates the sum of all supply curves
Demand curve that indicates the sum of all demand curves

Question 12

Equilibrium Point for (AS and AD)

Answer 12

Indicates the GDP of the country

Question 13

Recession

Answer 13

GDP declines for two quarters in a row

Question 14

Depression

Answer 14

GDP declines for a lot longer than two quarters in a row

Question 15

Result of Recession or Depression

Answer 15

Low Productivity
High Unemployment
Capital becomes less available
Economic Quality Declines

Question 16

Unemployment Rate

Answer 16

percentage comparing the number of people who cannot find a job with the number of people who are working or seeking to work

Ex - 100 people want to work –> 93 people (employed) –> 7 people have not found a job –> 7% unemployment rate

Question 17

Participation Rate

Answer 17

The measure used to calculate the percentage of working-age people who actually want to engage in work

• Sum of People who are working or seeking to work / Working Age Population

Question 18

Inflation

Answer 18

Buying power of money is reduced because extra money has been added to the system

Money Supply grows faster than productivity

Question 19

Macroeconomic Cycle / Circular Flow Model

Answer 19

A way to help understand the inter-relationship of a large variety of factors in a national economy