Business Economics 2 – Macro WITH CORRECT ANSWERS.

GDP measures/ GDP is calculated by... (3)CORRECT ANSWER Aggregate output, aggregate expenditure, aggregate income 2 uses of GDPCORRECT ANSWER To compare economic welfare over time, to compare economic welfare across countries 6 determinants of consumptionCORRECT ANSWER DISPOSABLE INCOME, interest rates, consumer confidence, wealth effects, availability of credit, inflation 7 factors affecting the level of investmentCORRECT ANSWER INTEREST RATES, rate of economic growth, costs, business expectations and confidence, access to credit, regulations, demand for exports Government spending excludes... (2)CORRECT ANSWER Intermediate goods, transfer payments Real GDPCORRECT ANSWER The total market value of final goods and services produced in a country in a given period of time when valued at constant prices Purchasing Power Parity (PPP)CORRECT ANSWER An exchange rate of one currency for another which compares how much a typical basket of goods costs in each country Economic growth is measured by...CORRECT ANSWER The CHANGE in real GDP Recession, ExpansionCORRECT ANSWER Two successive quarters of real GDP decline, a period of real GDP increase