Section 1: Guided Reading and Review Gross Domestic Product

) NAME CLASS ------------ DATE ------------- Section 1: Guided Reading and Review Gross Domestic Product r A. As You Read As you read Section 1, answer the following questions about gross domestic pr::jdt:ct. 1. What is the gross domestic product? ------------------------ 2. How is the expenditure approach used to calculate it? -------------- 3. How is the income approach used to calculate it? ----------------- 4. What is the difference between nominal GDP and real GDP? -------------------- Describe four limitations of using GDP to measure economic growth: 5. 6. 7. 8. 9. How is the gross national product derived from the gross domestic product? 10. How is GDP related to aggregate supply and aggregate demand? ---'----------- B. Reviewing Key Terms Match the descriptions in with the terms in. Write the letter of the -correct answer in the blank provided. You will not use all the terms. 11. a c;ystem that collects ill'3croeconomic Statistics on rroduction, income, investment, and savings 12. goods used in the production of final goods 13. GDP measured in current prices 14. goods that last a short period of time 15. GDP expressed in constant, or unchanging, prices 16. goods that last for a relatively long time 17. loss of the value of capital equipment that results from normal wear and tear. 18. the total amount of goods and services in the economy available at all possible price levels 19. the average of all prices in the economy 20. the annual income earned by U.S.-owned firms and U.S. residents 21. the dollar value of all final goods and services produced within a country's borders in a given year a. ::-eal GDP b. nominal GDP c. aggregate supply d. nondurable goods e. price level f. intermediate goods g. depreciation h. national income accounting i. gross domestic product j. durable goods ~~. gross national product '. aggregate demand (2 Chapter 12 Section 1: Guided Reading and Review

c~ss NAME----------------------------------- _ Section 1: Quiz Gross Domestic Product DATE -------------- A. Key Terms Match the descriptions in with the terms in. Write the letter of the correct answer in the blank provided. 1. a system that collects macroeconomic statistics on production, income, investment, and savings 2. the dollar value of all final goods and services produced within a country's borders in a given year 3. consumer goods that last for a long time 4. loss of the value of capital equipment that results from normal wear and tear 5. the average of all prices in the economy a. gross domestic product (GDP) b. depreciation c. price level d. durable goods e. national income accounting B. Main Ideas Write the letter of the correct answer in the blank provided. 6. What are intermediate goods? a. goods that are not sold or exchanged in an economy b. goods used in the production of other goods c. goods that were sold in earlier years d. goods that are produced outside the country 7. How does an economist calculate GDP for one year using the expenditure approach? a. add together all the amounts spent on final goods and services b. add up all the incomes received c. add the amounts spent on goods and services to the incomes received d. subtract the amounts received as income from the goods and services 8. What is the underground economy? a. the amount spent for environmental cleanup and similar products b. the goods and services people make or do themselves c. the products and income that are not reported as income to the government d. costs of such things as personal safety, vacations, and sick pay 9. Which of the following is a nondurable good? a. washing machine c. bicycle b. air conditioner d. gasoline 10. What is the difference between real GDP and nominal GDP? a. Real GDP is accurate to hundreds of dollars; nominal GDP is accurate to thousands of dollars. b. Real GDP includes nonmarket activities; nominal GDP has no nonmarket activities. c. Real GDP is based on constant prices; nominal GOP is based on the current year's prices. d. Real GOP allows for depreciation; nominal GOP allows for no depreciation. Chapter 12 Section 1: Quiz 31

c~ss NAME _ DATE Section 2: Guided Reading and Review Business Cycles A. As You Read As you read Section 2, fill in each item in the following diagram. Phases Contributing Factors Cycle Indicators 1.--------- 2. --------- 3. --------- 4. 5. 6. 7. 8. 9. --------- 10. --------- 11. --------- B. Reviewing Key Terms Define the following terms. 12. business cycle --------------------------------------------------- 13. expans,on 14. economic growth 15. peak 16. contraction 17. trough 18. recession ------------------------------------------------------- 19. depression ----------------------------------------------------- 20. stagflation--------------------------------------------- 21. leading indicators ---------------------------------------------- (4 Chapter 12 Section 2: Guided Reading and Review

NAME CLASS ------------- DATE -------------- Section 2: Quiz Business Cycles A. Key Terms Match the descriptions in Calumn I with the terms in. Write the letter of the correct answer in the blank provided. 1. a period of macroeconomic expansion followed by a period of contraction 2. a steady, long-term increase in real GDP 3. the lowest point in an economic contraction 4. the height of an.economic expansion 5. a prolonged economic contraction a. peak b. economic growth c. recession d. trough e. business cycle B. Main Ideas Write the letter of the correct answer in the blank provided. 6. What happens to consumer and business spending when the interest rates go up? a. both types of spending increase b. both types of spending decrease c. consumer spending increases and business spending decreases d. business spending increases and consumer spending decreases 7. What are the leading economic indicators supposed to predict? a. business cycles b. stagflaticn c. consumer expectations d. nonmarket activities 8. Which of the following finally brought the U.S. economy out of the Great Depression? a. World War I b. World War II c. the Korean War d. the Viemam War 9. Which of!he following was a lasting effect of the OPEC embargo in the 1970s on the U.S. econorr.y? a. higher gasc!ine?rices b. lower interest rates c. reduced t:se cf t- erroleum d. reduced taxes 10. What was the major change in the U.S. economy in the 1990s? a. more bank failures b. more capital equipment manufacturing c. higher impact of international trade d. heavier reliance on services Chapter 12 Section 2: Quiz 51

, I'"''' " 01, 1,' I I NAME----------------------------------- c~ss DATE ------------- Section 1: Quiz Unemployment A. Key Terms Match the descriptions of types of unemployment in with the terms in. Write the letter of the correct answer in the blank provided.. 1. when a period of steady work is followed by a period of unemployment each year 2. when unemployment rises during economic downturns and falls when the economy improves 3. when people change jobs or get laid off 4. when the skills of workers do not match the jobs that are available B. Main Ideas Write the letter of the correct answer in the blank provided. 5. How can changes in technology or consumer demand make it difficult for people to get jobs? a. by making it difficult for people to buy what they want b. by changing the number or kind of jobs available c. by creating a demand for things that are not available d. by making it possible for some people to work fewer hours 6. What does the unemployment rate represent? a. the total number of people who are not employed b. the total number of people who are unable to find work c. the percentage of the total population that is not employed d. the percentage of the total work force that is unemployed 7. What does "full employment" mean? a. There is no cyclical unemployment. b. Every person who wants to work has a job. c. Approximately 80 percent of people have jobs. d. Those who want to work have full-time jobs. 8. What can happen to the economy when the level of unemployment is very low? a. It can make it difficult for some to find jobs. b. It can create a booming economy. c. It can cause wages and prices to rise. d. It does not have a predictable effect. 9. Why don't government planners try to end seasonal unemployment? a. It would eliminate too many jobs. b. Many people do not want to work all year. c. It would be too expensive. d. It is a natural part of a healthy economy. 10. What is the term for a situation in which a person is overqualified for the job he or she has? a. partial employment c. low-skilled work b. underemployment d. discouraged worker a. seasonal unemployment b. cyclical unemployment c. frictional unemployment d. structural unemployment ( 14 Chapter 13 Section 1: Quiz

NAME CLASS ------------- DATE ------------ Section 2: Guided Reading and Review Inflation L A. As You Read As you read Section 2, answer the following questions. 1. What would you use to see how prices have changed over time? ----------------- 2. What does the example of the Barrow's house increasing from $12,000 to $150,000 over 50yearsshow? 3. How is the Consumer Price Index (CPI) used? ---------------------- 4. How does the Bureau of Labor Statistics determine the CPI? ---------------- 5. Explain the difference between creeping inflation and chronic inflation. ---------- tl 6. What happens when hyperinflation occurs over an extended period of time? --------- Describe three theories of the causes of inflation. 7. ------------------------------------ 8. --------------------------------------------------------- 9. ---------------------------------------------------------- How does inflation affect each of the following? 10. purchasing power---------------------------------------- 11. f~edincome 12. savings B. Reviewing Key Terms Define the following terms. 13. inflation rate----------------------------------------------- 14. deflation----------------------------------------------- 15. Consumer Price Index ------------'-------------------------------- 16. inflation 1:(1 17. wage-price spiral 18. price index---------------------------------------------------- Chapter 13 Section 2: Guided Reading and Review 15)

NAME----------------------------------- c~ss DATE ------------- I l Section 1: Quiz What Are Taxes? A. Key Terms Match the descriptions in with the terms in Column ll. Write the letter of the correct answer in the blank provided. 1. income a. tax base 2. a tax in which the percentage paid increases as income increases b. revenue 3. a tax in which the percentage paid decreases as income increases c. progressive tax 4. income, property, good, or service that is subject to tax d. regressive tax B. Main Ideas Write the letter of the correct answer in the blank provided. 5. What gives the U.S. government the right to collect taxes? a. custom of government c. the U.S. Constitution b. state laws in all 52 states d. an act of the U.S. Congress 6. What does the "equity" of a tax mean? a. The tax is simple to collect. b. The tax is fairly assessed. c. The tax is paid equally by everyone. d. The tax is paid only by those who will use the service it provides. 7. What happens to the percentage of an income that is taxed when income rises and the tax is a proportional one? a. The percentage of tax falls. b. The percentage of tax rises. c. The percentage of tax first rises and then falls. d. The percentage of tax stays the same. 8. How would you describe a tax that is assessed according to the benefits-received principle? a. Those who receive direct payments of the money the tax generates are the people who pay the tax. b. Those who receive the benefits the tax provides are the people who pay the tax. c. One group of people receives benefits from the tax but another group pays the tax. d. All groups receive benefits from the tax but not all groups pay equally. 9. On which of the following goods or services might a tax increase be hardest to pass on to consumers? a. gasoline c. automatic car washes b. groceries d. prescription medications 10. What determines the incidence of a tax? a. the elasticity of demand of the product taxed b. the laws of the government that imposes the tax c. the wealth of the people who are taxed d. the willingness to pay of the people who are taxed ' I 'i I J Chapter 14 Section 1: Quiz 3)

NAME c~ss _ DATE ------------- Section 2: Guided Reading and Review Federal Taxes -'\ A. As You Read As you read Section 2, fill in supporting facts or details under each main idea by answering each question. Main Idea: Individual income taxes are imposed on the income of all individuals living in the country. 1. Why do employers withhold a set amount of your income? 2. What is taxable income? ------------------------ Main Idea: Federal Insurance Contributions Act (FICA) taxes fund two large government programs. 3. What does Social Security provide? -------------------- 4. What is Medicare?-------------------------- Main Idea: Taxes are sometimes used to affect behavior. 5. What items are taxed for the purpose of changing behavior? B. Reviewing Key Terms Match the descriptions in with the terms in. Write the letter of the correct answer in the blank provided. 6. amounts that you can subtract from your income when filing taxes a. taxable income 7. form used to file one's mcome taxes b. tariff 8. income on which tax must be paid c. tax return 9. tax on a monetary gift from a living person valued above a certain amount d. withholding 10. tax on the total value of the money and property of a person who has died 11. tax payments taken out of an employee's pay before he or she receives a paycheck 12. tax levied on foreign goods brought into the United States e. deductions f. gift tax g. estate tax f4chapter 14 Section 2: Guided Reading and Review