1. Referring to Figure 14.3 above, explain what is occurring in the years 2008-2010 and then in 2005-2007 in terms of real GDP and potential.
2. From 2010 onward it appears that US real GDP is recovering. After referring to Figure 14.3 once again, what conclusion might you make about this recovery especially in terms of potential GDP?
3. How would you define a 'recession'?
4. Explain why economists termed the period following 1991 as the Great Moderation.
5. Real GDP does not include all goods and services produced. Explain.
6. The United Nations has constructed a Human Development Index (HDI). What does this index measure?
7. Where does the United States rank using the United Nation's HDI?
8. Why isn't the US ranked highest since it has one of the highest GDP's per person in the world?
9. If GDP increased and the unemployment rate decreased, what phase of the business cycle would you assume the economy is in?
10. When exactly do economists say that an economic expansion ends and a recession begins? When does a recession end?