ECN 211 MIDTERM 1 COMPREHENSIVE TEST PAPER 2026 SOLUTIONS VERIFIED

ECN 211 MIDTERM 2026 COMPREHENSIVE
STUDY GUIDE COMPLETE SOLUTIONS
VERIFIED

◉ Gross Domestic Product Equation. Answer: C + I + G + NX
(C + I + G + (Exports - Imports))


◉ Included in GDP. Answer: Tangible goods: Cars, Appliances, Food
items
Intangible goods: Dentist visit, Salon trip, Tax service
Any final goods produced in country (even if foreign owned)
Goods and Services currently produced


◉ 4 Expenditures of GDP. Answer: Consumption, Investment,
Government Purchases, and Net Exports


◉ Consumption. Answer: Spending by households on
goods/services with the exception of new housing


◉ Investment. Answer: Purchase of capital goods by businesses that
will be used to produce more goods in the future

, ◉ Government Purchases. Answer: Spending on goods/services by
local, state, and federal governments from the private sector. Does
not include transfer payments


◉ Net Exports. Answer: Exports - Imports


◉ Real GDP. Answer: Measures output in regards to inflation
Allows for better comparison of GDP year to year


◉ Real GDP Equation. Answer: Base year prices x Current Output


◉ Nominal GDP. Answer: Measure of output using current prices
Growth can be overstated


◉ Nominal GDP Equation. Answer: Current price x Current output


◉ GDP Deflator. Answer: Measures changes in price for all goods and
services produced


◉ GDP Deflator Equation. Answer: (Nominal GDP/Real GDP) x 100


◉ What is unemployment?. Answer: Someone who is actively
searching for work and cannot find a job