GDP Questions and Terms Section I 1. Define: GDP nominal GDP real GDP intermediate goods durable goods nondurable goods GNP depreciation price level aggregate supply aggregate demand 2. What economic activities are not included in GDP? 3. If aggregate demand rises, what happens to real GDP? Section II 4. Define: business cycle Recession depression 5. Which phase of a business cycle can lead an economy into a recession? 6. How can interest rates push an economy into contraction? Section III 7. Why do economists measure real GDP per capita? 8. What is capital deepening, and how does it contribute to economic growth? 9. How do patents encourage technological progress? 10. What role does saving play in the process of economic growth