Download Economics 2006-07

NAME _______________________________________________________________________ PERIOD ____ DATE ______
Economics
25 Points
Chapter 12.1: What is GDP?
I. Gross Domestic Product and Other Indicators
A. Key Concepts (What is GDP?)
1. What is analyzed as part of National Income Accounting?
2. Define GDP?
B. The Components of GDP
1. What are the 3 components of GDP?
a.
b.
c.
C. Output Expenditure Model (C+I+G+X=GDP)
1. Consumption includes
2. Investments that measures
a. Fixed
b. Inventory
3. Government spending includes
a. Why are Transfer payments not included?
4. What does Net Exports take into account?
a. What does it only count in GDP?
D. Two Types of GDP
1. Nominal GDP
2. Real GDP (why is this more accurate?)
E. What GDP Does Not Measure
1. Non-market Activities
2. Underground Economies
3. Quality of Life
F. Why do economists synthesize data? Explain why understanding GDP is important?
NAME _______________________________________________________________________ PERIOD ____ DATE ______
Economics
25 Points
Chapter 12.2: Business Cycles
II. Business Cycles
A. Key Concepts
1. What are business cycles?
B. Four stages of the Business Cycle?
1. What happens when the economy is expanding?
2. Describe the peak?
3. What happens during a contraction?
a. Define recession
b. Define depression
c. Define Stagflation
4. What is a trough and what does it mark?
C. Aggregate Demand and Supply
1. Define Aggregate Demand
2. Define Aggregate Supply
D. Why Do Business Cycles Occur? Summarize and explain each
1. Business Decisions (explain)
2. Changes in Interest Rates (explain)
3. Consumer Expectations (explain)
4. External Issues (explain)
5. What ripple effect did hurricane Katrina have on the economy?
E. Predicting the Business Cycle
1. Leading Indicators (Give an example)
2. Coincident Indicators (Give an example)
3. Lagging Indicators (Give an example)
F. Business Cycles in US History?
1. Use your knowledge of GDP and the Business cycles to describe what happened during the
“Great Depression”? Write a paragraph.
III.
Chapter 12.3: Stimulating Economic Growth
What is Economic Growth?
A. Gauging Economic Growth
1. What did many people believe were secrets to economic growth prior to Adam Smith?
B. Population and Economic Growth
1. How does population growth influence economic growth?
2. Define real GDP per capita
3. Real GDP is usually a measure of a nation’s standard of living, what does it not measure?
4. Why do you think nations with higher GDP have better health and education for their
populations?
C. What Determines Economic Growth? (4 factors)
1. Explain why Natural resources are not a guarantee of a nations wealth?
2. Why does the labor input of Human Resources seem the most important to some economists?
3. Explain why Capital deepening is an important aspect of economic growth?
4. Technology and Innovations (Entrepreneurship)
5. Explain why all 4 factors are important for improving economic growth?
D. Productivity and Economic Growth
1. How is Productivity Measured?
NAME _______________________________________________________________________ PERIOD ____ DATE ______
Economics
25 Points
2. Explain how each of the following contributes to productivity?
a. Quality of labor
b. Influence of technology and innovation
c. Energy costs
d. Financial Markets
3. How are productivity and growth related?
E. Based on what you learned what do you think the implications is for future economic growth
based on population growth and depleted resources? What does the future hold for our planet if we
stay with our current economic model? Write a paragraph.