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THE CIRCULAR FLOW MODEL. Complicating the Model. 1. Goods and services flow from a. firms to households via the factor market b. firms to households via the product market c . households to firms via the government d. households to firms via the factor market

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1. Goods and services flow from

  • a. firms to households via the factor market

  • b. firms to households via the product market

  • c. households to firms via the government

  • d. households to firms via the factor market

  • e. households to firms via the product market


2. The factors of production flow from

  • a. firms to households via the product market

  • b. firms to households via the factor market

  • c. households to firms via the government

  • d. households to firms via the product market

  • e. households to firms via the factor market


3. The money paid to households via the factor market is called

  • a. income

  • b. profit

  • c. wages

  • d. taxes

  • e. revenue


4. The money paid to firms via the product market is called

  • a. wages

  • b. income

  • c. profit

  • d. revenue

  • e. taxes


5. The money paid by households and firms to the government is called

  • a. profit

  • b. income

  • c. revenue

  • d. wages

  • e. taxes



  • 7 out of the circular flow. This is called a/an . When foreigners buy American exported goods, money flows into the circular flow. This is called a/an

  • a. injection

  • b. leakage

  • c. consumption

  • d. tax

  • e. inflation

    .



  • 8. All of the following are INJECTIONS into circular flow of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • a. subsidies

  • b. transfer payments (like social security)

  • c. exports

  • d. investments

  • e. savings


End of quiz
End of Quiz of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT


Video tutorial gdp 3 50
VIDEO TUTORIAL: GDP (3:50) of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • EPISODE 20: GDP (3:50)

  • EPISODE #20 – GDP


Gross domestic product gdp
Gross Domestic Product (GDP) of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • The value of all final goods and services

  • Produced within an economy domestically

  • In a single year

  • Measured by

    • Expenditure approach

      • C + I + G + X

    • Income approach


Video tutorials real gdp and economic growth
Video Tutorials: Real GDP and ECONOMIC GROWTH of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • EPISODE 21: Real GDP (2:36)

  • EPISODE #21 – REAL GDP

  • EPISODE 22: Growth (1:30)

  • EPISODE #22 - GROWTH

  • Don’t worry. You won’t have to work problems with the formulas on the test.


Average labor productivity
AVERAGE LABOR PRODUCTIVITY of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • a measure of how much the typical worker can produce

  • Mathematically, this is the economy’s

    AVG. LABOR = TOTAL OUTPUT (GDP)

    PRODUCTIVITY TOTAL # OF WORKERS


What s not counted in gdp
What’s NOT counted in GDP? of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

  • Used goods

  • Intermediate goods

  • Illicit sales (BLACK MARKET)

  • Personal goods and services

  • Transfer of assets

  • Transfer payments


Counting gdp
Counting GDP: of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT

EXPENDITURE METHOD:


  • 1. of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPTThe value of all final goods and services produced within an economy in a year:

  • a. GNP

  • b. GDP

  • c. CPI

  • d. the business cycle

  • e. the circular flow model


2 of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPT. Which of the following is NOT a component of GDP in the expenditure approach?

  • a. consumption

  • b. investment

  • c. government purchases

  • d. net exports

  • e. disposable income


3. of goods/services/$ in the product market and the flow resources/$ in the factor market between households and firms (injections in GDP) EXCEPTWhich category makes up the largest share of the United States’ GDP?

  • a. consumption

  • b. investment

  • c. government purchases

  • d. net exports

  • e. net imports


4. Which of the following is adjusted for inflation (changes in prices from year to year)?

  • a. consumption

  • b. net exports

  • c. GNP

  • d. nominal GDP

  • e. real GDP


5 in prices from year to year)?. Economic growth is measured by

  • a. an decrease in nominal GDP.

  • b. an decrease in real GDP.

  • c. an increase in nominal GDP.

  • d. an increase in real GDP.

  • e. none of these. It’s measured with GNP.


6. We don’t count the value of intermediate goods in GDP because

  • a. their sale is not legal

  • b. they are not actually bought or sold

  • c. they simply represent a transfer of money

  • d. they would be double counted when we count the value of final goods

  • e. all of these


  • 7 because. Which of the following is not counted in GDP?

  • a. the purchase of a haircut

  • b. the government's purchase of flak jackets

  • c. the construction of a power plant

  • d. the purchase of an I-phone

  • e. the purchase of ten shares of Microsoft stock


  • 8. Money becauseis simply moved around and is not used to pay for goods and services (stock transactions, welfare payments, Social Security payments):

  • a. Personal goods and intermediate goods

  • b. Illicit sales

  • c. Black market

  • d. Transfer payments and financial transfers

  • e. None of these


  • 9 because. Which category of GDP is the government's payment of a Social Security check counted in?

  • a. net exports

  • b. government expenditures

  • c. investment

  • d. consumption

  • e. The government's payment of a Social Security check is NOT counted in GDP.


  • 10. becauseWhich of the following statements is NOT correct?

  • a. General Motors’ purchase of machinery is counted in investment.

  • b. Joe's purchase of a hot car stereo is not counted in GDP.

  • c. Gertathe German's purchase of an American made movie is counted in net exports.

  • d. The Defense Department's purchase of a flak jacket is counted in government purchases.

  • e. Levi’s purchase of denim material is counted in consumption.



The business cycle 1 07
The Business Cycle (1:07) counted in?

  • EPISODE 23: Business Cycles (1:07)

  • EPISODE #23 – BUSINESS CYCLES

  • Paul Solman: THE BUSINESS CYCLE – “The Beer Game”


  • RECESSION counted in?

    • 2 consecutive quarters (6 mo.) of negative growth in real GDP

  • DEPRESSION

    • 8 consecutive quarters (2 yrs.) of negative growth in GDP


Online video series
Online Video Series counted in?

  • ECONOMICS USA - 30 minute programs which give explain economic concepts, giving historical background and context. Stream free.

  • See Program #3: Economic Growth

  • See Program #4: Booms and Busts for the Business Cycle.


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