Chapter 6: Measure Economic Activity

________ are the primary demanders of goods and services in the economy.

________ represents the production of all final goods and services in the economy.

________ is generally the largest component of GDP, accounting for about 71 percent of total GDP in 2011.

________ are goods that are produced abroad but purchased domestically.

________ is composed of all of the consumption, investment, government spending, and net export expenditures that make up GDP.

The AD /AS model can be used to show how changes in the ________ and sellers impact GDP.

The ________ shows the movement of income and spending between households and businesses in the economy.

Not all government spending is included in GDP because spending on things such as ________, debt service, and unemployment insurance are not purchases of goods and services.

________ is a supplier in input markets when it sells or rents its resources to buyers.

________ are the primary suppliers of output and the primary demanders of labour and other economic resources.

In ________, business firms are the suppliers of goods and services, and households are the demanders of goods and services.

________ are included in GDP because they are produced domestically but not captured in the other expenditure components of GDP.

________ does not include the purchases of financial products like stocks and bonds, because stocks and bonds are not goods and services that are produced.

________ is called gross domestic product because it counts only production that occurs within a given economy's borders.

________ and investment made up about 22 percent of GDP in 2011.

________ on tools, computers, and buildings is investment, as is spending on new residential housing.

On the ________, increases in the price level reduce the amount of goods and services that consumers can buy, so the quantity of goods and services demanded falls and the economy moves upward along the AD curve.

________ (GDP) measures the dollar value of all final goods and services produced in an economy during a given period (such as per quarter or per year)

The ________ uses incomes earned by producers to measure GDP.

________ or recessions are periods of slowdown in economic activity, reduced employment, and declines in production.

________ and services are goods that are sold to their end users and will not be sold again.

The purchase of foreign- made goods and services by ________ is called imports.

________ are recurring expansions and contractions in the level of aggregate economic activity.

A closed economy is one that does not engage in ________.

________ means to gather a set of items together to form a total or whole.

Using the expenditures approach, GDP can be divided into four basic components: consumption expenditure (C), ________ (I), government expenditure and investment (G), and net exports (exports [X] minus imports [M])

The ________ and AS tells the equilibrium level of GDP and the equilibrium price level in the economy.

________ is a measure of the difference between exports and imports.

________ (C) is household spending on final goods and services.

________ is a demander in input markets when it hires workers or buys land and capital.

________ are goods produced domestically but sold abroad.

________ (AD) is the demand for all goods and services in an economy.

________ are the recurring expansions and contractions in GDP over time.

output markets and input markets

consumption expenditure (C), private investment (I), government expenditure and investment (G), and net exports (exports [X] minus imports [M])

M)^^

**

**

M)**

4 percent of GDP