Economics Unit 2 Test

Dollar value of all final goods and services produced within a country’s borders in one year

• GDP

• CPI

• NIU

• Circular Flow Model

Formula for Expenditures Approach GDP

• C + I + G + Xn

• W + R + I + PR

• (Price of market basket / Price of market basket in base year) x 100

Formula for Income Approach GDP

• C + I + G + Xn

• W + R + I + PR

adds up all spending done in the economy by households, businesses, the government, and other countries.

• GDP

• Expenditures Approach

• Income Approach

• Nomial Value

• CPI

adds up all the income earned in the economy including wages, rent, interest, and profit.

• Income Approach

• Nominal Approach

• GDP

• NIU

Calculating GDP by adding up the dollar value added at each stage of the production process

• Expenditures Approach

• Income Approach

• Nominal Value Approach

• Value-added Approach

modle that shows how households, businesses, and the government interact

• Business Cycle

• GDP Model

• NUI Model

• Circular Flow Diagram

Select the ways in which a Circular Flow Diagram Works

• Businesses sell goods/services to households in the product market

• Households sell resources to businesses in the resource market

• Public goods and services are provided by the government.

• Businesses gain goods and services publicly

• I have no clue

Select the transactions that are not included in GDP

• Intermediate goods

• Non-production transactions or financial transactions (used goods, stocks, etc)

• Non-market activities (illegal activity)

• Net Exports ad Imports out of state

How many workers are in the labor force?

• 1,100

• 1,250

• 2,500

• 1,200