MACROECONOMICS CLEMSON BRAD HOBBS
FINAL EXAM QUESTIONS WITH UPDATED
SOLUTIONS .
Gross Domestic Product (GDP) - Correct Answer -- primary indicator of a nation's output
and income
- measure of the total value (PxQ) of everything produced within a specific economy over a
defined period of time (annually)
-analyzes economic growth and compares growth across nations
Expenditure Approach - Correct Answer -- households
- FINAL goods
GDP= C+I+G+ (X-M)
C= - Correct Answer -consumption
I= - Correct Answer -investment
G= - Correct Answer -government purchases
(X-M)= - Correct Answer -Net exports of goods and services
Income Approach - Correct Answer -A method of computing GDP that measures the income-
wages, rents, interest, and profits-received by all factors of production in producing final
goods and services.
Gross domestic product (GDP) explicitly measures output expenditures but is simultaneously
measures - Correct Answer -a nation's income
What are the three uses of GDP? - Correct Answer -1. Measuring living standards.
1
, 2. Measuring economic growth.
3. Determining whether an economy is experiencing recession or expansion.
Per Capita GDP - Correct Answer -GDP divided by the total population
(GDP per person)
Economic growth - Correct Answer -the percentage change in real per capita GDP
Inflation - Correct Answer -The growth in the overall level of prices in an economy
Price Level - Correct Answer -An index of the average prices of goods and services
throughout the economy.
When price level increases.... - Correct Answer -inflation occurs
When price level decreases... - Correct Answer -deflation occurs
Hyperinflation - Correct Answer -A very rapid rise in the price level; an extremely high rate
of inflation.
GDP deflator - Correct Answer -Nominal GDP/Real GDP x 100
a measure of the price level used to calculate real GDP
Nominal GDP - Correct Answer -GDP measured in current prices and not adjusted for
inflation
Real GDP - Correct Answer -GDP adjusted for inflation
Real GDP= - Correct Answer -(Nominal GDP/Price Index) x 100
business cycle - Correct Answer -a short-run fluctuation in economic activity
2
FINAL EXAM QUESTIONS WITH UPDATED
SOLUTIONS .
Gross Domestic Product (GDP) - Correct Answer -- primary indicator of a nation's output
and income
- measure of the total value (PxQ) of everything produced within a specific economy over a
defined period of time (annually)
-analyzes economic growth and compares growth across nations
Expenditure Approach - Correct Answer -- households
- FINAL goods
GDP= C+I+G+ (X-M)
C= - Correct Answer -consumption
I= - Correct Answer -investment
G= - Correct Answer -government purchases
(X-M)= - Correct Answer -Net exports of goods and services
Income Approach - Correct Answer -A method of computing GDP that measures the income-
wages, rents, interest, and profits-received by all factors of production in producing final
goods and services.
Gross domestic product (GDP) explicitly measures output expenditures but is simultaneously
measures - Correct Answer -a nation's income
What are the three uses of GDP? - Correct Answer -1. Measuring living standards.
1
, 2. Measuring economic growth.
3. Determining whether an economy is experiencing recession or expansion.
Per Capita GDP - Correct Answer -GDP divided by the total population
(GDP per person)
Economic growth - Correct Answer -the percentage change in real per capita GDP
Inflation - Correct Answer -The growth in the overall level of prices in an economy
Price Level - Correct Answer -An index of the average prices of goods and services
throughout the economy.
When price level increases.... - Correct Answer -inflation occurs
When price level decreases... - Correct Answer -deflation occurs
Hyperinflation - Correct Answer -A very rapid rise in the price level; an extremely high rate
of inflation.
GDP deflator - Correct Answer -Nominal GDP/Real GDP x 100
a measure of the price level used to calculate real GDP
Nominal GDP - Correct Answer -GDP measured in current prices and not adjusted for
inflation
Real GDP - Correct Answer -GDP adjusted for inflation
Real GDP= - Correct Answer -(Nominal GDP/Price Index) x 100
business cycle - Correct Answer -a short-run fluctuation in economic activity
2
