Tuesday, January 18, 2011


Reviewing Facts:
2. b. a. the nominal GDP is the current GDP.

Identifing Ideas:
5. gross. net. Net domestic product is a more representative measure of a nation's actual output of new goods than GDP because it doesn't include depreciation.

Understanding Ideas:
2. none. d. a,b, and c are use to avoid double counting when economists measure GDP.
3. none. d. a,b, and c are use by economists to create a price index.
7. none. d. a,b, and c are examples of a coincident indicator.
8. none. a. use of consumer installment credit is an example of a lagging indicator.

2. i. b. Nominal GDP is the value of a nation's gross domestic product at the current prices of the period being measured.
4. t. f. Unlike GDP, the GNP included the income of the overseas divisions of U.S companies. 

expansion. peak. it is turning point of the economy.
peak. expansion. it is when economic activity is increasing toward a peak. 

C+I+G+(X-M)= GDP
C- Personal consumption expenditures: is the sum of expenditures by household by durable goods, nondurable goods, and services.
I- Gross investment: is the sum of expenditures on capital equipment, inventories, and structures
G-Government purchases: is the sum of expenditures by all government bodies on goods and services.
X-M-Net Exports and Imports: equals the difference between spending on domestic goods by foreigners and spending on foreign goods by domestic resident.

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