Unit 5 Economic indicators and Unit 6 Personal Finance

Front

Which one of the following is an example of consumption spending that would be counted toward GDP this year?
- Samantha bought an oven for her cooking show on Food Network.
- Stephanie bought a laptop for her brother.
- Mr. Smith spent $1500 to buy a used car for his son.
- Elis invested $2000 in a mutual fund through his employer.
- Jim purchased 200 shares of Google stock.

Back

Stephanie bought a laptop for her brother.

Front

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

Back

7.5%

Front

Explain the limitations of using GDP to measure economic welfare. Underground activity:

Back

includes illegal activity, includes activity not reported in order to evade taxes, is sizable for many countries.

Front

Products that would be used in calculating GDP include: toys manufactured in China at a factory owned by a US company, cars manufactured in Tennessee at a factory owned by a Japanese automobile company, plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys, cotton cloth manufactured in India and sold to clothes makers in the United States.

Back

toys manufactured in China at a factory owned by a US company

Front

Why does solely relying on GDP to measure economic welfare provide a limited view of economic health?

Back

It only accounts for economic transactions and ignores social factors.

Front

If wages grew at a 3% rate this year and average prices grew _______, people would be off this year compared with last year.

Back

slower than 3%; better

Front

What are the causes and effects of business cycles in a market economy?

Back

Inflation and deflation, Supply and demand fluctuations, Government policy and international factors.

Front

Which statement about the period from 1918 through 1929 is most clearly supported by information in the graph? Options: The percentage of income controlled by the wealthiest Americans declined. The income gap between the wealthiest fifth and the rest of the population increased. The overall per capita income in the United States declined. The percentage of income controlled by the poor steadily increased.

Back

The income gap between the wealthiest fifth and the rest of the population increased.

Front

Which is the best indicator that an economy is entering the contraction phase of the business cycle? Options: Reduction in the average work week, Increase of inventory in the new home market, Decrease of business inventory, Reduced time needed for business deliveries

Back

Reduction in the average work week

Front

During the business cycle, an economic expansion occurs: In between the peak and trough.

Back

In between the peak and trough.