AP MACROECONOMICS COURSE FINAL
QUESTIONS AND ACCURATE ANSWERS
PREMIUM STUDY PACK
●● gross domestic product
Answer: 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
Answer: products that are purchased for resale or further processing or
manufacturing.
●● final goods
Answer: goods that have been purchased for final use and not for resale
or further processing or manufacturing.
●● multiple counting
Answer: wrongly including the value of intermediate goods in the gross
domestic product; counting the same good or service more than once.
●● value added
,Answer: 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
Answer: the method that adds all expenditures made for final goods and
services to measure the gross domestic product.
●● income approach
Answer: 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)
Answer: the expenditures of households for durable and nondurable
consumer goods and services.
●● gross private domestic investment (Ig)
Answer: Expenditures for newly produced capital goods (such as
machinery, equipment, tools, and buildings) and for additions to
inventories.
●● net private domestic investment
, Answer: gross private domestic investment less consumption of fixed
capital; the addition to the nation's stock of capital during a year.
●● government purchases (G)
Answer: 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)
Answer: Exports minus imports
●● national income
Answer: 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
Answer: 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
QUESTIONS AND ACCURATE ANSWERS
PREMIUM STUDY PACK
●● gross domestic product
Answer: 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
Answer: products that are purchased for resale or further processing or
manufacturing.
●● final goods
Answer: goods that have been purchased for final use and not for resale
or further processing or manufacturing.
●● multiple counting
Answer: wrongly including the value of intermediate goods in the gross
domestic product; counting the same good or service more than once.
●● value added
,Answer: 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
Answer: the method that adds all expenditures made for final goods and
services to measure the gross domestic product.
●● income approach
Answer: 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)
Answer: the expenditures of households for durable and nondurable
consumer goods and services.
●● gross private domestic investment (Ig)
Answer: Expenditures for newly produced capital goods (such as
machinery, equipment, tools, and buildings) and for additions to
inventories.
●● net private domestic investment
, Answer: gross private domestic investment less consumption of fixed
capital; the addition to the nation's stock of capital during a year.
●● government purchases (G)
Answer: 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)
Answer: Exports minus imports
●● national income
Answer: 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
Answer: 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
