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Measuring Economic
Activity
The Business Cycle
Consumer Prices &
Interest Rates
Investments & Borrowing
Misc.
$100 $100 $100 $100 $100
$200 $200 $200 $200 $200
$300 $300 $300 $300 $300
$400 $400 $400 $400 $400
$500 $500 $500 $500 $500
$600 $600 $600 $600 $600
$1000 $1000 $1000 $1000 $1000
Measuring Economic Activity$100
• The more goods and services produced, the healthier an economy is considered to be.
True or False?
Answer
Measuring Economic Activity$200
• Dividing GDP by the total population of a country results in that country’s ______________.
Answer
Measuring Economic Activity$300
• GDP measures a country’s economic output during ______________.
Answer
Measuring Economic Activity$400
• GDP does not include:A. Consumer spending for clothes
B. Business spending for a new building
C. Government spending to build a new library
D. The value of the work you do for yourself
Answer
Measuring Economic Activity$500
• Chuck receives a monthly social security check from the US government. This would not be counted when measuring Chuck’s personal income.
True or False?
Answer
Double Jeopardy
Question
Double Jeopardy Measuring Economic Activity
• Which of the following probably would result in a decrease in worker productivity?
A. A company pays for raises for top management by laying off 60% of its employees
B. An office replaces its 10-year-old computers with brand-new machines and the latest software
C. A factory trains workers how to use shop equipment more efficiently
D. The boss promises a bonus to all employees who come into work over the weekend to finish an important project.
Answer
Measuring Economic Activity$1000
• Retail sales include the sales of durable and nondurable goods bought by ________________.
Answer
The Business Cycle$100
• At the peak of the business cycle is _____________.
Answer
The Business Cycle$200
• If GDP growth slows for at least ___ quarter(s) in a calendar year, the economy is probably in a recession.
Answer
The Business Cycle$300
• The movement of the economy from one condition to another and back again is called a ________.
Answer
The Business Cycle$400
• _________ is the phase in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again.
Answer
The Business Cycle$500
• _________ is a phase marked by a prolonged period of high unemployment, weak consumer sales, and business failures.
Answer
The Business Cycle$600
• Business cycles are the recurring ups and downs of gross domestic product.
True or False?
Answer
The Business Cycle$1000
• Our economy has not had a depression for more than 60 years. This period in US history is referred to as _____________________________.
Answer
Consumer Prices & Interest Rates $100
• During periods of deflation, prices drop so demand increases greatly.
True or False?
Answer
Consumer Prices & Interest Rates $200
• Inflation:A. Tends to decrease wages
B. Always discourages economic growth
C. Increase the buying power of the dollar
D. Is most harmful to people living on fixed incomes
Answer
Consumer Prices & Interest Rates $300
• The major influence on the level of interest rates is:
A. The rate of inflation
B. The supply and demand for money
C. The consumer price index
D. The unemployment rate
Answer
Consumer Prices & Interest Rates $400
• _________________ is a number that compares prices in one year with some earlier base year.
Answer
Consumer Prices & Interest Rates $500
• What is the main cause of inflation?
Answer
Consumer Prices & Interest Rates $600
• Explain how mild inflation can stimulate economic growth.
Answer
Consumer Prices & Interest Rates $1000
• One of the most watched measures of inflation is call the ________________________________.
Answer
Investing & Borrowing$100
• The money for capital projects comes from two main sources: stock investments & bonds.
True or False?
Answer
Investing & Borrowing$200
• The money people deposit in banks and other financial institutions:
A. Is an important factor in the economic growth of a country.
B. Is lent to businesses to fund capital projects.
C. Generally earns interest for the depositors.
D. All of the above
Answer
Investing & Borrowing$300
• If you purchase a corporate bond, you are a(n):
A. Creditor
B. Stockholder
C. Partner
D. Entrepreneur
Answer
Investing & Borrowing$400
• Which of the following is an example of a capital project?
A. A mid-size company restocks the supply cabinet with pencils and markers
B. A large corporation gives all employees a 5% wage increase
C. A small office buys several boxes of paper for the printer
D. A small business purchases two new pickup trucks
Answer
Investing & Borrowing$500
• When a government spends less than it takes in, a budget __________ is the result.
Answer
Investing & Borrowing$600
• The total amount owed by the federal government is called the ________________________________.
Answer
Double Jeopardy
Question
Double JeopardyInvesting & Borrowing
• What are future economic challenges for a country’s economy?– Name 2 that were discussed in the textbook.
Answer
Misc.$100
• One component of gross domestic product is the value of a country’s exports plus the value of the imports into the country.
True or False?
Answer
Misc.$200
• In the US, all people over the age of 21 who do not have a full-time, paying job are considered “unemployed.”
True or False?
Answer
Misc.$300
• ______________ refers to the steady increase in the production of goods and services in an economic system.
Answer
Misc.$400
• Which of the following items would be counted when measuring GDP?
A. Rolls of raw fabric
B. Sheets of steel
C. Tomatoes still growing on the vine
D. A fully assembled washing machine
Answer
Misc.$500
• Which of the following is not a characteristic of a depression?
A. A high demand for goods and services
B. Business failures
C. GDP falls rapidly
D. A prolonged period of high unemployment
Answer
Misc.$600
• Retail sales:A. Indicate general consumer spending patterns
in the economy
B. Include the sales of services bought by businesses
C. Usually remain stable in times of economic growth
D. All of the above
Answer
Misc.$1000
• What is the main cause of unemployment?
Answer
Measuring Economic Activity Answer - $100
• TRUE!
Return
Measuring Economic Activity Answer - $200
• GDP per capita!
Return
Measuring Economic Activity Answer - $300
• 1 year
Return
Measuring Economic Activity Answer - $400
• D – The value of work you do for yourself.
Return
Measuring Economic Activity Answer - $500
• False!– Personal Income = Wages, salaries, investment
income, & government payments
Return
Measuring Economic Activity Answer - $600
• A – A company pays for raises for top management by laying off 60 percent of its employees
Return
Measuring Economic Activity Answer - $1000
• Consumers!
Return
The Business Cycle Answer - $100
• Prosperity!
Return
The Business Cycle Answer - $200
• 2 quarters!
Return
The Business Cycle Answer - $300
• Business Cycle!
Return
The Business Cycle Answer - $400
• Recovery!
Return
The Business Cycle Answer - $500
• Depression!
Return
The Business Cycle Answer - $600
• True!
Return
The Business Cycle Answer - $1000
• The Great Depression!
Return
Consumer Prices & Interest Rates Answer - $100
• False!– It usually occurs in periods of a recession and
depression. Prices of products are lower, but people have less money to buy them.
Return
Consumer Prices & Interest Rates Answer - $200
• D – is most harmful to people living on fixed incomes!
Return
Consumer Prices & Interest Rates Answer - $300
• B – the supply and demand for money!
Return
Consumer Prices & Interest Rates Answer - $400
• Price index!
Return
Consumer Prices & Interest Rates Answer - $500
• Demand for goods and services is greater than supply!
Return
Consumer Prices & Interest Rates Answer - $600
• During mild inflation, wages can rise more slowly than prices. The prices of products are high in relation to the cost of labor, resulting in higher profits for the producer. This expands production and leads to greater employment. The newly employed workers increase spending, and therefore increase demand in the economy.
Return
Consumer Prices & Interest Rates Answer - $1000
• Consumer Price Index (CPI)!
Return
Investing & Borrowing Answer - $100
• False!– Money comes from 3 main sources: personal
savings, stock investments, and bonds.
Return
Investing & Borrowing Answer - $200
• D – All of the above!
Return
Investing & Borrowing Answer - $300
• A – Creditor!
Return
Double JeopardyInvesting & Borrowing
• Emerging markets
• Lack of technology, education, and business systems
• Increase standard of living
• Prevent unemployment
Return
Investing & Borrowing Answer - $500
• Surplus!
Return
Investing & Borrowing Answer - $600
• National Debt!
Return
Investing & Borrowing Answer - $400
• D – A small business purchases two new pickup trucks!
Return
Misc.$100
• False!– 1 component of GDP is exports of a country
LESS the imports into the country.
Return
Misc.$200
• False!– All people above age 16 who are actively
working or seeking work
Return
Misc.$300
• Economic growth!
Return
Misc.$400
• D – a fully assembled washing machine!
Return
Misc.$500
• A – high demand for goods and services!
Return
Misc.$600
• A – Indicate general consumer spending patterns in the economy.
Return
Misc.$1000
• Reduced demand for the goods and services being produced by various workers
Return
FINAL JEOPARDY!!
• Explain the difference between a recession and a depression.
FINAL JEOPARDYANSWER
• Recession is a period following prosperous time in the business cycle…decreased demand, lowing of business production, rise in unemployment, GDP slows for 2 or more quarters of the year
• If recession deepens and spreads throughout the entire economy, a depression may occur…high unemployment, weak consumer sales, business failures, GDP falls rapidly