ch 2-4

Question 1

gross domestic product (GDP)

Answer 1

the total amount of goods and service produced within an economy within a specific time period (such as a year).

Question 2

nominal GDP

Answer 2

the sum of the money (nominal) values of all final goods and services produced in the domestic economy during a specified period of time (such as one year).

Question 3

real GDP

Answer 3

the value of all final goods and services produced in the domestic economy during a specified period of time (such as one year), calculated by valuing outputs of different years at a common set of prices

Question 4

recession

Answer 4

a decline in Real GDP for at least two consecutive quarters (i.e., 6 months

Question 5

stagflation

Answer 5

when high inflation and high unemployment occurs at the same time.

Question 6

intermediate good

Answer 6

A good that is used as an input in the production of a final good

Question 7

final good

Answer 7

Goods and services that are consumed by their ultimate (or final) consumer

Question 8

calculating nominal GDP

Answer 8

nominal gdp in year x = (quantity Ax * price Ax ) + (QBx * PBx)

Question 9

calculating real GDP

Answer 9

real gdp in year x = (QAx * PAy) + (QBx * PBy)