Econ 101 Week 7 UPDATED ACTUAL Exam Questions and CORRECT Answers
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Course
Econ 101
Institution
Econ 101
Econ 101 Week 7 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Gross Domestic Product (GDP) - CORRECT ANSWER - The value of of the output of all
goods and services produced within the borders of a country.
Consumption (C) - CORRECT ANSWER - Consumption by households. Largest
component of...
Econ 101 Week 7 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Gross Domestic Product (GDP) - CORRECT ANSWER - The value of of the output of all
goods and services produced within the borders of a country.
Consumption (C) - CORRECT ANSWER - Consumption by households. Largest
component of GDP. Roughly 2/3 of GDP in any year.
Investment (I) - CORRECT ANSWER - Real purchases of physical plant and equipment
by businesses. Fluctuates frequently, 15-20% of GDP
Government (G) - CORRECT ANSWER - Demand in the U.S. is relatively small, 20ish%
of GDP
Trade Balance - CORRECT ANSWER - Gap between exports (X) and Imports (M)
Trade Surplus - CORRECT ANSWER - When exports exceed imports.
Trade Deficit - CORRECT ANSWER - When imports exceed exports.
GDP formula - CORRECT ANSWER - C + I + G + (X - M)
Durable Goods - CORRECT ANSWER - Long lasting goods like cars and refrigerators.
Nondurable Goods - CORRECT ANSWER - Short-lived goods like food and clothing.
Inventories - CORRECT ANSWER - Goods that have been produced, but not yet sold.
, Double counting - CORRECT ANSWER - A potential mistake to be avoided when
measuring GDP, in which output is counted two or more times as it travels through the stages of
production.
Final Goods and Services - CORRECT ANSWER - Output used directly for consumption,
investment, government and trade purposes. Contrast with intermediate goods.
Intermediate Goods and Services - CORRECT ANSWER - Output provided to other
businesses at the intermediate stage of production, not for final users. Contrast to final goods.
Exchange Rate - CORRECT ANSWER - The rate at which one currency exchanges for
another.
Per Capita GDP - CORRECT ANSWER - GDP divided by the population.
Recession - CORRECT ANSWER - A significant decline in national output.
Depression - CORRECT ANSWER - An especially lengthy and deep decline in output.
("A really bad recession")
Peak - CORRECT ANSWER - During the business cycle, the highest point of output
before a recession begins.
Trough - CORRECT ANSWER - During the business cycle, the lowest point of output in a
recession before recovery.
Business Cycle - CORRECT ANSWER - The relatively short-term movement of the
economy in and out of recession.
Human Development Index (HDI) - CORRECT ANSWER - Measure of standard of
living. Considers life expectancy at birth, adult literacy, and per capita GDP
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