Lecture 2

Question 1

Economic growth refers to…

Answer 1

A phase of the business cycle when GDP is increasing

Question 2

Business cycle

Answer 2

Alternating periods of economic expansion and recessuon

Question 3

Expansion/Economic Growth

Answer 3

Rising real GDP, from a trough to next peak

Question 4

Recession/Contraction

Answer 4

Falling RGDP, from peak to next trough, real GDP has to been declining for at least 6 months

Question 5

Recovery

Answer 5

Early part of expansion, immediately after trough

Question 6

Depression

Answer 6

Deep and long recession

Question 7

GDP calculated by the____ should be approximately the same as the the GDP calculated by the_____ bc…

Answer 7

Spending approach, income approach, bc every expenditure will end up as somebody’s income

Question 8

Real GDP

Answer 8

Value of final goods and services evaluated at base-year prices

Question 9

Nominal GDP

Answer 9

Value of final goods and services evaluated at current-year prices