Measuring Aggregate output: CPI

Question 1

define GDP

Answer 1

market value of all FINAL goods & services produced during a period of time.

Question 2

Define Aggregate

Answer 2

BIG PICTURE

Question 3

what unit is GDP measured in

Answer 3

dollars

Question 4

GDP only measures final goods, what doesn’t count?

Answer 4

Intermediate goods/used goods

Question 5

what might the GDP miss

Answer 5

1. under-the-table/illegal goods
2. Household production

Question 6

what is consumption

Answer 6

spending by households on goods/services

Question 7

define investment (GDP)

Answer 7

spending by firms on new factories, office buildings, machinery, etc. (not avg. day things)

Question 8

list components of GDP

Answer 8

1. consumption
2. Investment spending
3. Government purchases

Question 9

what component of GDP is the largest

Answer 9

Consumption

Question 10

spending on services..

Answer 10

exceeds spending on goods

Question 11

state and local spend more than..

Answer 11

federal spending

Question 12

most years imports..

Answer 12

exceed exports

Question 13

GDP can be considered..

Answer 13

a measure of wellness

Question 14

some issues with using GDP as a comparison

Answer 14

1. Value of leisure
2. pollution adjustment
3. social problems uncounted for
4. doesn’t count income distribution