1.When a business spends money to repair broken windows it ________ counted in real GDP calculations because __________.However, the purchase of a home originally built in 1905 ___________ be counted because_____________.

A. Would be; it is an intermediate good; would not; it is a used good

B.Would not be; it is an intermediate good; would not; it is a used good

C.Would not be; it is not a final good; would; it is part of consumer spending

D.Would be; it is a final good; would; it is part of consumer spending

2.Which of the following is a true statement regarding what is counted in the GDP calculations?

A.Increasing leisure time, brought on by the growing number of Americans staying home, will be counted as a market transaction in nominal, or real GDP.

B.The increase in demand for dry ice to ship the Covid-19 vaccines will be counted as an intermediate good since the final price of the vaccine will reflect shipping costs.

C.The reduction in air pollution that is taking place right now as people stay off the roads will increase the GDP.

D.The 2020 recession has been made worse by America's relatively high value-added tax and the trade war with China.

3.A ________ represents the initial drop in the GDP that is taking place in this, the ___ quarter of the economic calendar. If GDP falls through the spring of 2021 this will be a ______. If the GDP changed the way it did in the 1930s we would most likely call the change a _________ and what we are going through now ends ________ of ___________.

A.Recession; 1st; contraction; depression; over 20 years; expansion

B.Contraction; 2nd;recession; depression; 10 years; economic growth

C.Depression; 2nd; recession; contraction; 4 years; slow economic growth

D.Business cycle; 3rd; depression; economic growth; 2 years; the Trump recovery

4.According to the NBER the U.S. economy is still in a recession this December that began in February of 2020. In considering the impact of declining international trade and the global recession on the flow of spending and income, we can conclusively say the following:

A.There will be a decrease in the injection of investment into our economy but the flow of income will largely remain unchanged.

B.Both aggregate and disposable income will fall, leading to less consumer spending and a reduced GDP.

C.International trade is not part of this model therefore only the recession will impact the level of income and savings in America.

D.As exports fall, the injection of income into America's aggregate expenditures will increase since the trade deficit will be reduced.

E.A and D only

5.When looking at the business cycle over the last 100 years we can say that:

A.Presidents Hoover and Roosevelt presided over the longest period of declining GDP. However, President Obama presided over the slowest economic recovery since WWII.

B.The rate of economic growth under Presidents Reagan and Clinton was greater than under President Obama.This is due largely to Reagan's tax cuts and Clinton's international trade agenda.

C.Under President Trump the economy's pace of economic growth accelerated -before the recession we are likely in.

D.The rate of growth under President Reagan and Bill Clinton was longer than normal, due in part to more nations pursuing capitalism and technological breakthroughs.

E.All of the above.