Exam Bank Solution Manual for AP Macroeconomics Module 2 Already Passed
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Course
Macroeconomics
Institution
Macroeconomics
Exam Bank Solution Manual for AP Macroeconomics Module 2 Already Passed
national income accounting - Answers The techniques used to measure the overall production of the economy and other related variables for the nation as a whole.
gross domestic product - Answers The total market value of all ...
Exam Bank Solution Manual for AP Macroeconomics Module 2 Already Passed
national income accounting - Answers The techniques used to measure the overall production of the
economy and other related variables for the nation as a whole.
gross domestic product - Answers The total market value of all final goods and services produced
annually within the boundaries of the United States, whether by U.S. or foreign-supplied resources.
intermediate goods - Answers products that are purchased for resale or further processing or
manufacturing.
final goods - Answers goods that have been purchased for final use and not for resale or further
processing or manufacturing.
multiple counting - Answers wrongly including the value of intermediate goods in the gross domestic
product; counting the same good or service more than once.
value added - Answers The value of the product sold by a firm less the value of the produces (materials)
purchased and used by the firm to produce the product.
expenditures approach - Answers the method that adds all expenditures made for final goods and
services to measure the gross domestic product.
income approach - Answers the method that adds all the income generated by the production of final
goods and services to measure the gross domestic product.
personal consumption expenditures (C) - Answers the expenditures of households for durable and
nondurable consumer goods and services.
gross private domestic investment (Ig) - Answers Expenditures for newly produced capital goods (such
as machinery, equipment, tools, and buildings) and for additions to inventories.
net private domestic investment - Answers gross private domestic investment less consumption of fixed
capital; the addition to the nation's stock of capital during a year.
government purchases (G) - Answers expenditures by government for goods and services that
government consumes in providing public goods and for public (or social) capital that has a long lifetime;
the expenditures of all governments in the economy for those final goods and services.
net exports (Xn) - Answers Exports minus imports
national income - Answers total income earned by resource suppliers for their contributions to gross
domestic product; equal to the gross domestic product minus nonincome charges, minus net foreign
factor income.
, indirect business taxes - Answers such taxes as sales, excise, and business property taxes, license fees,
and tariffs that firms treat as costs of producing a product and pass on (in whole or in part) to buyers by
charging higher prices.
consumption of fixed capital - Answers an estimate of the amount of capital worn out or used up
(consumed) in producing the gross domestic product; also called depreciation.
net domestic product (NDP) - Answers gross domestic product less the part of the year's output that is
needed to replace the capital goods worn out in producing the output; the nation's total output
available for consumption or additions to the capital stock.
personal income (PI) - Answers the earned and unearned income available to resource suppliers and
others before the payment of personal taxes.
disposable income (DI) - Answers personal income less personal taxes; income available for personal
consumption expenditures and personal saving.
nominal GDP - Answers the GDP measured in terms of the price level at the time of measurement
(unadjusted for inflation).
price index - Answers an index number that shows how the weighted-average price of a "market basket"
of goods changes over time.
real GDP - Answers Gross Domestic Product adjusted for inflation; gross domestic product in a year
divided by the GDP price index for that year, the index expressed as a decimal.
consumer price index (CPI) - Answers an index that measures the prices of fixed "market basket" of
some 300 goods and services bought by a "typical" consumer.
per capita output - Answers found by dividing real GDP by population.
economic growth - Answers (1) an outward shift in the production possibilities curve that results from an
increase in resource supplies or quality or an improvement in technology; (2) an increase of real output
(gross domestic product) or real output per capita.
rule of 70 - Answers a method for determining the number of years it will take for some measure to
double, given its annual percentage increase. Example: To determine the number of years it will take for
the price level to double, divide 70 by the annual rate of inflation.
productivity - Answers a measure of average output or real output per unit of input. For example, the
productivity of labor is determined by dividing real output by hours of work.
business cycle - Answers recurring increases and decreases in the level of economic activity over periods
of years; consists of peak, recession, trough, and recovery.
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