Eco 201 - Exam #3 Study Guide
Questions and Answers 100% Pass
(E1) Economic Development - ✔✔The sustained concerted actions of *policy makers*
that promote the *standard of living* and *economic health* of a specific area (country)
-Indicators: GDP, Income distribution, education and literacy, access to healthcare.
(E1) Economic Growth - ✔✔A phenomenon of *market productivity* and an increase in
*GDP*. It is *one aspect* of economic development
(E2) GDP - Gross Domestic Product - ✔✔Measures the *market value* of all final goods
and services of a country during a one year period.
-aggregate final output of *residents & businesses* in an economy in a one year period
(E3) Problems (short-comings) related to using GDP as a measure of national welfare. -
✔✔
(E4) the sources of economic growth. - ✔✔-increase inputs (resources)
-improve productivity of resources (ex. education, training programs)
(E5) Ingredients to economic growth - ✔✔-Institutions w/ incentives compatible with
growth
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, -technological development
-resource availability
-investment and accumulation of capital
(E6) Income Method {Measuring GDP} - ✔✔Measures gross domestic product (GDP) by
adding:
*R*ent+*W*ages+*i*nterest+*P*rofit
[R+W+i+P]
=GDP
(E6) Expenditure Method {Measuring GDP} - ✔✔Measures gross domestic product by
adding:
*C*onsumption+*I*nvestment+*G*overnment expenditure+(E*X*ports - I*M*ports)
[C+I+G+(X-M)]
=GDP
(E7) The Business Cycle - ✔✔The upward or downward movement of economic activity
that occurs around the secular growth trend
(E7) Peak/Boom {the business cycle} - ✔✔The highest point between the end of an
economic expansion and the start of a contraction in a business cycle.
-business activity has reached max
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Questions and Answers 100% Pass
(E1) Economic Development - ✔✔The sustained concerted actions of *policy makers*
that promote the *standard of living* and *economic health* of a specific area (country)
-Indicators: GDP, Income distribution, education and literacy, access to healthcare.
(E1) Economic Growth - ✔✔A phenomenon of *market productivity* and an increase in
*GDP*. It is *one aspect* of economic development
(E2) GDP - Gross Domestic Product - ✔✔Measures the *market value* of all final goods
and services of a country during a one year period.
-aggregate final output of *residents & businesses* in an economy in a one year period
(E3) Problems (short-comings) related to using GDP as a measure of national welfare. -
✔✔
(E4) the sources of economic growth. - ✔✔-increase inputs (resources)
-improve productivity of resources (ex. education, training programs)
(E5) Ingredients to economic growth - ✔✔-Institutions w/ incentives compatible with
growth
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, -technological development
-resource availability
-investment and accumulation of capital
(E6) Income Method {Measuring GDP} - ✔✔Measures gross domestic product (GDP) by
adding:
*R*ent+*W*ages+*i*nterest+*P*rofit
[R+W+i+P]
=GDP
(E6) Expenditure Method {Measuring GDP} - ✔✔Measures gross domestic product by
adding:
*C*onsumption+*I*nvestment+*G*overnment expenditure+(E*X*ports - I*M*ports)
[C+I+G+(X-M)]
=GDP
(E7) The Business Cycle - ✔✔The upward or downward movement of economic activity
that occurs around the secular growth trend
(E7) Peak/Boom {the business cycle} - ✔✔The highest point between the end of an
economic expansion and the start of a contraction in a business cycle.
-business activity has reached max
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
