Question

1. The "business cycle" refers to

short-run fluctuations in macroeconomic activity.

a long-run increase in GDP.

changes in the economy between winter and summer.

2. Which of these would be counted as part of official GDP measures?

earnings made by Uber and Lyft drivers

casual jobs that are paid in cash "under the table"

measures of happiness among a country's citizens

the damage to an environment measured in terms of deforestation

3.The U.S. gross domestic product is equal to the total market value of all

final goods and services produced by U.S. citizens in the United States.

intermediate goods and services produced by citizens in the United States.

intermediate goods and services produced by resources in the United States.

final goods and services produced by resources in the United States.

changes in the economy over the course of the four seasons.

4.

(Table) According to the table, net domestic product is

properitors income 300

capital consumption allowance 440

federal gov't purchases goods and servises 200

compensation of employees 800

personal consumption expendentiures 950

corporate profits 90

exports 60

gross private domestic investment 500

rental income 30

state and local gov't purchases of goods and services 150

net interest 100

federal govt deficit 250

imports9 0

$1,580 billion.

$1,080 billion.

$1,770 billion.

$1,330 billion.

Answer 1

1) short run fluctuations in business activity.

( Economists refer to the short run fluctuations in business activity as business cycle. A business cycle is composed of phases of expansion and contraction. A rise in economic activities can be observed in the expansion phase. A fall in business activities can be observed in the contraction phase.)

2) Earnings made by uber and lift drivers

( It's an income received by them for their labour. So it's a part of GDP. Environmental damages , happiness and under the table payments are not included in the calculation of GDP.)

3) Final goods and services produced by resources in the United States

( GDP is the money Value of all the goods and services produced in the domestic territory of a nation during a year. GDP of US includes all the goods and services produced by either citizen supplied or foreigner supplied resources employed in US. Value of intermediate goods are not counted in the calculation of GDP. If it was included, double counting would have occurred.)

4)$1330 billion

( GDP = consumption expenditure+ private investment+ government spending+ net exports

=950+500+(200+150)+(60-90)

=950+500+350-30

=1570

Net domestic product = Gross Domestic Product- depreciation ( capital consumption allowance)

=1770-440

=1330

Note : government spending= federal government spending+State and local government spending

Net Exports= Exports - Imports