Unit 3 Part 4 Quiz

Question 1

WHY DO WE MEASURE GROWTH?

Answer 1

BECAUSE OF THE GREAT DEPRESSION. ECONOMISTS FELT IT WAS IMPORTANT TO MEASURE TO PREDICT AND PREVENT FUTURE ECONOMIC DOWNTURNS

Question 2

NIPA

Answer 2

NATIONAL INCOME AND PRODUCT ACCOUNTS

Question 3

WHAT DOES NIPA DO?

Answer 3

COLELCTS DATA ON PRODUCTION, INCOME, INVESTMENT, AND SAVINGS

Question 4

WHO IS NIPA MAINTAINED BY?

Answer 4

THE DEPARTMENT OF COMMERCE

Question 5

WHAT IS NIPA DATA USED FOR?

Answer 5

THE DATA IS REPORTED AND USED TO INFLUENCE GOVERNMENT POLICY

Question 6

GDP OR GROSS DOMESTIC PRODUCT

Answer 6

THE DOLLAR VALUE OF ALL FINAL GOODS AND SERVICES PRODUCES WITHIN A COUNTRY’S BORDERS IN A GIVEN YEAR

Question 7

WHAT IS A FINAL GOOD?

Answer 7

FINAL GOODS ARE THOSE SOLD TO CUSTOMERS

Question 8

WHAT WAS THE GDP OF U.S IN 2020?

Answer 8

21.43 TRILL

Question 9

PER CAPITA GDP

Answer 9

GDP DIVIDED BY A COUNTRY’S POPULATION

Question 10

WHAT DOES PER CAPITA GDP DO?

Answer 10

MEASURES THE AVERAGE INCOME PER PERSON IN A COUNTRY

Question 11

EX: OF PER CAPITA GDP

Answer 11

If a country’s GDP is $10 trillion and it has 250 million people, the per capita GDP is
$40,000

Question 12

INTERMEDIATE PRODUCTS

Answer 12

GOODS USED TO MAKE OTHER PRODUCTS ARE NOT COUNTED

Question 13

SECONDHAND SALES

Answer 13

TRANSACTIONS INVOLVING USED GOODS ARE EXCLUDED

Question 14

NON- MARKET TRANSACTIONS

Answer 14

ACTIVITIES LIKE HOUSEHOLD CHORES OR VOLUNTEER WORK ARE NOT PART OF GDP

Question 15

UNDERGROUND ECONOMY

Answer 15

ILLEGAL OR UNREPORTED ACTIVITIES ARE NOT INCLUDED

Question 16

WHAT DOES GDP MEASURE WITHIN?

Answer 16

A NATIONS BORDERS!!

Question 17

GDP DOES NOT INCLUDE:

Answer 17

PRODUCTS MADE BY A US COMPANY OVERSEAS.
- A CAR MADE IN THE US BY TOYOTA (JAPANESE COMPANY)

Question 18

NOMINAL GDP

Answer 18

GDP MEASURES IN CURRENT PRICES
- DOES NOT ALWAYS MEASURE AN INCREASE IN OUTPUT

Question 19

REAL GDP

Answer 19

REAL GDP IS MEASURED BY CALCULATING GDP WITH CONSTANT PRICE

Question 20

NONMARKET ACTIVITIES

Answer 20

GDP DOES NOT MEASURE GOODS AND SERVICES THAT PEOPLE MAKE OR DO THEMSELVES, SUCH AS CARING FOR CHILDREN, MOWING LAWNS, OR COOKING DINNER

Question 21

THE UNDERGROUND ECONOMY

Answer 21

THERE IS MUCH ECONOMIC ACTIVITY WHICH, ALTHOUGH INCOME IS GENERATED, NEVER REPORTED TO THE GOVERNMENT, EX: BLACK MARKET TRANSACTIONS, AND UNDER THE TABLE WAGES

Question 22

NEGATIVE EXTERNALITIES

Answer 22

UNINTENDED ECONOMIC SIDE EFFECTS, SUCH AS POLLUTION,HAVE A MONETARY VALUE THAT IS OFTEN NOT REFLECTED IN GDP

Question 23

QUALITY OF LIFE

Answer 23

ALTHOUGH GDP IS OFTEN USED AS A QUALITY OF LIFE MEASUREMENT, THERE ARE FACTORS NOT COVERED BY IT. THESE INCLUDE LEISURE TIME, PLEASANT SURROUNDINGS, AND PERSONAL SAFETY

Question 24

INFLUENCES ON GDP

Answer 24

• AGGREGATE SUPPLY
• AGGREGATE DEMAND

Question 25

AGGREGATE SUPPLY

Answer 25

THE TOTAL AMOUNT OF GOODS AND SERVICES AVAILABLE IN AN ECONOMY AT ALL PRICE LEVELS

Question 26

AGGREGATE DEMAND

Answer 26

THE TOTAL AMOUNT OF GOODS AND SERVICES DEMANDED IN AN ECONOMY AT ALL PRICE LEVELS

Question 27

IS IT ACCURATE?

Answer 27

- MANY THINGS TO CALCULATE IN GDP AND MUCH IS MISSED OR OVERLOOKED - IT DOES PROVIDE A BASELINE - MEASUREMENT NOT ACCURATE BUT CONSTANT

Question 28

GNP OR GROSS NATIONAL PRODUCT

Answer 28

GNP measures the total income earned by a country's residents, regardless of where they are located

Question 29

SUB CATEGORIES OF GDP

Answer 29

- NET NATIONAL PRODUCT -NATIONAL INCOME - PERSONAL INCOME - DISPOSABLE PERSONAL INCOME

Question 30

NET NATIONAL PRODUCT (NNP)

Answer 30

deducts depreciation (wear and tear on assets) from GNP

Question 31

NATIONAL INCOME (NI)

Answer 31

the total income earned by individuals and businesses in a country

Question 32

PERSONAL INCOME

Answer 32

income received by individuals, including transfer payments.

Question 33

DISPOSABLE PERSONAL INCOME

Answer 33

PI minus taxes, representing the income people have available for spending.

Question 34

ECONOMIC SECTOR

Answer 34

a big group or category that groups together businesses and activities based on what they do. It helps us understand how different parts of the economy work

Question 35

EXAMPLES OF ECONOMIC SECTORS

Answer 35

- CONSUMER SECTOR - INVESTMENT SECTOR - GOVERNMENT SECTOR - FOREIGN SECTOR

Question 36

CONSUMER SECTOR

Answer 36

Higher GDP and income mean more money for consumers to spend, boosting demand for goods and services.

Question 37

INVESTMENT SECTOR

Answer 37

Businesses use GDP data to plan investments. High GDP can signal growth opportunities

Question 38

GOVERNMENT SECTOR

Answer 38

Government uses GDP for economic planning, taxation, and budgeting

Question 39

FOREIGN SECTOR

Answer 39

High GDP can attract foreign investments and influence exchange rates.

Question 40

GNP

Answer 40

"THE FLIP SIDE OF THE COIN OF GDP"