Question

Question 11 pts

The value of production can be measured by counting:

The money received by businesses as they sell final goods and services produced.

The money distributed by businesses as they pay all costs.

Both A and B.

Question 31 pts

The increased participation of housewives in the labor force

increased GDP as their production moved from the home to the official market.

decreased GDP because the value of housewives' activities is not included in GDP.

did not change GDP because the value of housewives' activities is not included in GDP.

did not change GDP because the value of housewives' activities does not add to economic well-being.

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Question 41 pts

Gross Domestic Product is a measure of the:

total market value of all sales in the economy during a period of time.

total market value of all goods and services produced in the economy during a period of time.

total market value of all final goods and services produced in the economy during a period of time.

total market value of all private goods and services produced in the economy during a period of time.

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Question 51 pts

Recessions generally occur in the U.S. economy about every:

3 years.

5-7 years.

10 years.

20 years.

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Question 61 pts

The main flaw with GDP is that it only includes final goods and services not primary and intermediate good production.

True

False

Neither A nor B.

Answer 1

1. The value of production can be measured by counting:

It should be A.

A because GDP is the value of all final goods and services produced by the economy. And, when we say it is the money received by firms as they sell all final goods and services produced is in line with the definition of GDP.

B can’t be true because it gives us the income approach of GDP calculation.

2. The increased participation of housewives in the labor force should increase GDP as their production moved from the home to the official market.

Housewife’s work at home is not paid for. So, it is not included in GDP calculation. Intuitively, if they are moving in formal labour market, this will generate some income and hence can potentially increase the GDP.  

3. Gross Domestic Product is a measure of the is the total market value of all final goods and services produced in the economy during a period of time.

This is a simple definition.

4. Recessions in US are usually erratic. Last one was in 2007 (Great Recession), prior to that it was in 2000 ( dot com crisis), prior to that in early 1990’s. So, on a safer side we can say they come at an interval of 10 years.

5. The main flaw with GDP is that it only includes final goods and services not primary and intermediate good production.

False. If it is included would lead to problem of double counting. The main contention would be exclusion of non tradable goods and services.