LSU ECON 2010 EXAM 1 REVIEW
QUESTIONS AND CORRECT
ANSWERS
Final Goods and Services ✅✅CORRECT ANSW-are consumed by the ultimate user
intermediate goods and services ✅✅CORRECT ANSW-are used up in the production of final goods
intermediat goods and services ✅✅CORRECT ANSW-are not included in GDP to avoid double
counting
goods ✅✅CORRECT ANSW-can be sold as a final product or used as an intermediate good
money ✅✅CORRECT ANSW-is not a capital good
value added ✅✅CORRECT ANSW-the market value of the product minus the cost of inputs
purchased from other firms
Domestic Activity ✅✅CORRECT ANSW-activity that is measured within a country's borders
value ✅✅CORRECT ANSW-must be produced in the year considered
Households, Firms, Government, Foreigners ✅✅CORRECT ANSW-four users of final goods
more ✅✅CORRECT ANSW-as things become ____________ expensive people are going to buy
less of it
less ✅✅CORRECT ANSW-as things become _____________ expensive people are going to buy
more of it
Substitution effect ✅✅CORRECT ANSW-buyers switch to substitutes when prices goes up
, GDP ✅✅CORRECT ANSW-total of all goods and services in an economy
GDP ✅✅CORRECT ANSW-the market value of final goods and services produced in a country in a
given period of time
GDP Expenditure Equations ✅✅CORRECT ANSW-Y= C+I+G +NX
Y ✅✅CORRECT ANSW-gross domestic product or output
C ✅✅CORRECT ANSW-consumption expenditure
I ✅✅CORRECT ANSW-Investment
G ✅✅CORRECT ANSW-Government purchases
NX ✅✅CORRECT ANSW-Net Exports
Investment ✅✅CORRECT ANSW-Purchases of stocks, bonds, and other financial assets
GDP ✅✅CORRECT ANSW-Labor income + Capital Income
Labor income ✅✅CORRECT ANSW-Wages, Salaries, benefits, and incomes of the self-employed
Labor Income ✅✅CORRECT ANSW-about 2/3rds of GDP
Capital Income ✅✅CORRECT ANSW-pays for physical capital and intangibles
Production, Expenditure, Income ✅✅CORRECT ANSW-three GDP approaches
Prices change and quantity of output changes ✅✅CORRECT ANSW-GDP changes because of
QUESTIONS AND CORRECT
ANSWERS
Final Goods and Services ✅✅CORRECT ANSW-are consumed by the ultimate user
intermediate goods and services ✅✅CORRECT ANSW-are used up in the production of final goods
intermediat goods and services ✅✅CORRECT ANSW-are not included in GDP to avoid double
counting
goods ✅✅CORRECT ANSW-can be sold as a final product or used as an intermediate good
money ✅✅CORRECT ANSW-is not a capital good
value added ✅✅CORRECT ANSW-the market value of the product minus the cost of inputs
purchased from other firms
Domestic Activity ✅✅CORRECT ANSW-activity that is measured within a country's borders
value ✅✅CORRECT ANSW-must be produced in the year considered
Households, Firms, Government, Foreigners ✅✅CORRECT ANSW-four users of final goods
more ✅✅CORRECT ANSW-as things become ____________ expensive people are going to buy
less of it
less ✅✅CORRECT ANSW-as things become _____________ expensive people are going to buy
more of it
Substitution effect ✅✅CORRECT ANSW-buyers switch to substitutes when prices goes up
, GDP ✅✅CORRECT ANSW-total of all goods and services in an economy
GDP ✅✅CORRECT ANSW-the market value of final goods and services produced in a country in a
given period of time
GDP Expenditure Equations ✅✅CORRECT ANSW-Y= C+I+G +NX
Y ✅✅CORRECT ANSW-gross domestic product or output
C ✅✅CORRECT ANSW-consumption expenditure
I ✅✅CORRECT ANSW-Investment
G ✅✅CORRECT ANSW-Government purchases
NX ✅✅CORRECT ANSW-Net Exports
Investment ✅✅CORRECT ANSW-Purchases of stocks, bonds, and other financial assets
GDP ✅✅CORRECT ANSW-Labor income + Capital Income
Labor income ✅✅CORRECT ANSW-Wages, Salaries, benefits, and incomes of the self-employed
Labor Income ✅✅CORRECT ANSW-about 2/3rds of GDP
Capital Income ✅✅CORRECT ANSW-pays for physical capital and intangibles
Production, Expenditure, Income ✅✅CORRECT ANSW-three GDP approaches
Prices change and quantity of output changes ✅✅CORRECT ANSW-GDP changes because of
