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Principles of Economics: Exam Three
Questions and Answers (100% Correct
Answers) Already Graded A+
What are the big three of macroeconomics? [ Ans: ] inflation
GDP
unemployment
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What does the federal reserve do to moderate the economy? [
Ans: ] raises or lowers interest rates depending on the state of the
economy; works to bring it back to equilibrium
Define GDP [ Ans: ] the market value of all final good and
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services produced in a country in a given year
CARES ABOUT LOCATION
Define GNP [ Ans: ] the market value of all final goods and
services produced by a country in a given year
DOES NOT CARE ABOUT LOCATION
Define Inventories [ Ans: ] stuff that a company produces in one
year, but does not sell until the next year
Define Intermediate Good [ Ans: ] a good that is used to make
the final product
NOT included in GDP
What types of good are purchased with personal means of
payment? [ Ans: ] Final goods
What types of good are purchased with a company account? [
Ans: ] Intermediate goods
How do you know a good is purchased on a company account?
[ Ans: ] the payment method has a tax ID number
What is GDP also known as? [ Ans: ] The Stock Concept
, 2
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How do you calculate GDP using the Expenditure Approach? [
Ans: ] GDP=C+I+G+Nx
What component is always the largest when calculating GDP? [
Ans: ] Consumption
Define consumption [ Ans: ] when consumers spend on durable
goods, non-durable goods, and services
What are durable goods? [ Ans: ] goods that are made to serve
more than 3 years
cars, appliances, TVs
What are non-durable goods? [ Ans: ] goods that are made to
serve less than three years
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food
What is Investment composed of? [ Ans: ] 3 buckets
What are the three buckets of investment? [ Ans: ] New Capital,
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New construction, and Change in business inventories
National defense services provided by the military are [ Ans: ]
included in GDP at cost
Government purchases include all of the following except [ Ans:
] social security benefits paid by the federal government
Which of the following would increase the government purchases
component of U.S. GDP? [ Ans: ] The U.S. federal government
pays $3 billion in salaries to soldiers in the military.
Investment [ Ans: ] change in inventories, fixed investment, new
capital
If prices in the current year are higher on average than in the base
year, real GDP in the current year ______ nominal GDP in the
current year. [ Ans: ] less than
Comparisons of economic activity over time should be made
using: [ Ans: ] real GDP
Real GDP is measured in ______ prices; nominal GDP is measured
in ______ prices. [ Ans: ] base year; current year
For Expert help and assignment solutions, +254707240657
Principles of Economics: Exam Three
Questions and Answers (100% Correct
Answers) Already Graded A+
What are the big three of macroeconomics? [ Ans: ] inflation
GDP
unemployment
© 2025 Assignment Expert
What does the federal reserve do to moderate the economy? [
Ans: ] raises or lowers interest rates depending on the state of the
economy; works to bring it back to equilibrium
Define GDP [ Ans: ] the market value of all final good and
Guru01 - Stuvia
services produced in a country in a given year
CARES ABOUT LOCATION
Define GNP [ Ans: ] the market value of all final goods and
services produced by a country in a given year
DOES NOT CARE ABOUT LOCATION
Define Inventories [ Ans: ] stuff that a company produces in one
year, but does not sell until the next year
Define Intermediate Good [ Ans: ] a good that is used to make
the final product
NOT included in GDP
What types of good are purchased with personal means of
payment? [ Ans: ] Final goods
What types of good are purchased with a company account? [
Ans: ] Intermediate goods
How do you know a good is purchased on a company account?
[ Ans: ] the payment method has a tax ID number
What is GDP also known as? [ Ans: ] The Stock Concept
, 2
For Expert help and assignment solutions, +254707240657
How do you calculate GDP using the Expenditure Approach? [
Ans: ] GDP=C+I+G+Nx
What component is always the largest when calculating GDP? [
Ans: ] Consumption
Define consumption [ Ans: ] when consumers spend on durable
goods, non-durable goods, and services
What are durable goods? [ Ans: ] goods that are made to serve
more than 3 years
cars, appliances, TVs
What are non-durable goods? [ Ans: ] goods that are made to
serve less than three years
© 2025 Assignment Expert
food
What is Investment composed of? [ Ans: ] 3 buckets
What are the three buckets of investment? [ Ans: ] New Capital,
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New construction, and Change in business inventories
National defense services provided by the military are [ Ans: ]
included in GDP at cost
Government purchases include all of the following except [ Ans:
] social security benefits paid by the federal government
Which of the following would increase the government purchases
component of U.S. GDP? [ Ans: ] The U.S. federal government
pays $3 billion in salaries to soldiers in the military.
Investment [ Ans: ] change in inventories, fixed investment, new
capital
If prices in the current year are higher on average than in the base
year, real GDP in the current year ______ nominal GDP in the
current year. [ Ans: ] less than
Comparisons of economic activity over time should be made
using: [ Ans: ] real GDP
Real GDP is measured in ______ prices; nominal GDP is measured
in ______ prices. [ Ans: ] base year; current year
