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

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Measuring Economic Activity Answer - $400

• D – The value of work you do for yourself.

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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!

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The Business Cycle Answer - $100

• Prosperity!

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The Business Cycle Answer - $200

• 2 quarters!

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The Business Cycle Answer - $300

• Business Cycle!

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The Business Cycle Answer - $400

• Recovery!

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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!

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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

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Investing & Borrowing Answer - $500

• Surplus!

Return

Investing & Borrowing Answer - $600

• National Debt!

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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