(21)Generally, a recession is defined as a decline in real GDP lasting at least:
(a)1 year
(b)6 months
(c)3 months
(d)One quarter
(22)Suppose the market value of lawn mowing services performed by members of households in the US in 2016 was $20b, macroeconomists who say that US GDP in 2016 would have increased by $20b, would be_______________________________
(a)Correct
(b)Incorrect
(c)More information needed for an answer
(d)None of the above
(23)Another name for undistributed corporate profits is:
(a)Corporate taxes
(b)Personal income
(c)Retained earnings
(d)Transfer payments
(24)Which of the following statements is false?
If net export is positive in an economy, it implies that:
(a)GDP will increase
(b)There is a surplus on the BOT
(c)There is a deficit on the BOT
(d)The value of exports is greater than the value of imports
Table#2-Macroeconomic Data
|
Year |
GDP in Current dollars (billions) |
Implicit price deflator |
GDP in real or 1982 dollars (billions) |
Population (millions) |
GDP per capita 1982 dollars |
|
1970 |
1,215.5 |
44.0 |
3,417.8 |
205.1 |
11,788 |
|
1971 |
46.4 |
2,483.6 |
207.7 |
||
|
1972 |
1,312.6 |
4,608.2 |
209.9 |
12,426 |
|
|
1973 |
1,359.3 |
2,746.1 |
12,959 |
||
|
1974 |
1,472.8 |
54.0 |
213.9 |
||
|
1975 |
59.3 |
5,695.4 |
216.0 |
||
|
1976 |
1,882.8 |
2,825.3 |
12,960 |
||
|
1977 |
1,990.5 |
67.3 |
220.2 |
||
|
1978 |
75.2 |
3,115.9 |
12,998 |
||
|
1979 |
78.8 |
3,183.0 |
225.1 |
||
|
1980 |
2,732.0 |
3,151.1 |
13,839 |
(25)Which of the following is the GDP in current dollars in 1975 in Table#2 above?
(a)$31,265.7b
(b)$2,343.2b
(c)$3,377.4b
(d)$6,876.4b
21 - Option B
6 months at least.
Recession is a phase in the business cycle which lasts atleast 6 months or more.
It is not for a period of less than 6 months. And may not last exactly one year. Hence option B is correct.
22 - Option A
Correct
GDP refers to the market value of the goods and services produced in a domestic economy. In the given case the market value of the service is $ 20. Hence the GDP would have increased by $ 20.
23 - Option C
Retained earning
These are the part of the corporate profits that are left after the distribution of dividend , interest and other payments which are to be made. These profits are not distributed .
Corporate profits are distributed to the shareholders , transfer payments and person income are not part of corporate profit. Hence they will be wrong.
24 - Option C
There is a deficit on BOP.
Deficit on BOP is when the value of the imports exceed the value of exports. There is a negative balance on BOT.
The other given three statements are true as per the given condition , hence option C will be false and the answer for the question.
(21)Generally, a recession is defined as a decline in real GDP lasting at least: (a)1 year...