chap 12.2

Question 1

To forecast real GDP, economic forecasters divide aggregate demand into its four key components: private sector, public sector, investment sector, and foreign sector.

true
false

Answer 1

false

Question 2

A conditional forecast of real GDP is

a forecast that is conditional on the time period in which it was made.

a forecast that explains what real GDP will be under alternative assumptions about the spending components.

another name for the Blue Chip Consensus forecast.

a forecast based on potential GDP as opposed to the spending components of GDP.

a forecast using one of the 54 forecasts listed in Blue Chip Economic Indicators.

Answer 2

a forecast that explains what real GDP will be under alternative assumptions about the spending components.

Question 3

In the United States, consumption is by far the largest component of aggregate demand.

true
false

Answer 3

true