Deck 4: Economic Forecasting

Question 1

If you sold your stereo to your friend for $500, it would increase the value of the gross national product by $500.

Answer 1

False

Question 2

Investment spending includes all purchases of capital goods, including buildings, equipment and inventories by private businesses and nonprofit institutions, but excludes purchases of new residential housing by individuals.

Answer 2

False

Question 3

Consumption spending refers to spending by individuals and nonprofit organizations on newly produced goods and services except for housing) and is frequently broken down into three categories: nondurable goods, durable goods, and services.

Answer 3

True

Question 4

Gross national product for a country is the market value of all goods and services, both intermediate and final, produced with factors of production owned by the residents of a country, during some particular time period, usually one year.

Question 5

Gross domestic product for a country is the market value of all goods and services, both intermediate and final, produced within the country, regardless of the ownership of the productive factors, during some particular time period, usually one year.

Question 6

Consumption spending refers to spending by individuals and nonprofit organizations on newly produced goods and services except for housing).

Question 7

If a U.S. resident were working in Germany for her firm, the market value of her final goods and services would be counted in the gross domestic product of the U.S.

Question 8

Gross national product for a country is the market value of all final goods and services produced with factors of production owned by the residents of a country, during some particular time period, usually one year.

Question 9

Government expenditures do not include such things as welfare payments because these are considered to be transfers of income, not payment for goods and services.

Question 10

Government expenditures are expenditures for newly produced goods and services, including government invest expenditures, by all levels of government.

Question 11

The value of owner-occupied houses and the purchases of such dwellings are included in consumption spending.

Question 12

Net exports is the term denoting the value of newly produced foreign goods purchased by the United States imports) less the value of newly produced U.S. goods and services purchased by foreigners exports).

Question 13

Investment spending includes all purchases of capital goods, including buildings, and inventories by private businesses and nonprofit institutions, and purchases of new residential housing by individuals.

Question 14

The market value of the final goods and services produced in a Japanese owned and operated factory in the United States would be counted in the gross domestic product.

Question 15

It is important to use the market value of all final goods and services so the double counting does not occur.

Question 16

Forecasting is the process of analyzing available data on economic variables and relationships and predicting future values of certain economic variables.

Question 17

Consumption spending refers to spending by individuals and nonprofit organizations on newly produced goods and services except for housing) and is frequently broken down into three categories: noninvestment goods, investment goods, and current consumption.

Question 18

Net Exports is the term denoting the value of newly produced U.S. goods and services purchased by foreigners exports) less the value of newly produced foreign goods purchased by the United States imports).

Question 19

Investment spending includes all purchases of capital goods, including buildings, and inventories by private businesses and nonprofit institutions, as well as all money spent on stocks and bonds.

Question 20

Gross domestic product for a country is the market value of all final goods and services produced within the country, regardless of the ownership of the productive factors, during some particular time period, usually one year.

Question 21

Barometric forecasting uses current values of certain variables, called indicators, to predict future values of other economic variables.

Question 22

The business cycle consists of four parts: peak, contraction, trough, and expansion.

Question 23

Variables whose changes typically follow changes in other economic variables are called leading indicators.

Question 24

Variables whose changes roughly coincide with changes in other economic variables are called coincident indicators.

Question 25

Time series data are observations of a particular variable at a specific point in time.

Question 26

An example of a trend factor would be an increase in the sales of sunscreen in the summer.

Question 27

Variables whose current changes give an indication of future changes in other variables are called coincident indicators.

Question 28

Trend factors are those that reflect movements in economic variables over time.

Question 29

The three main categories of indicators are leading, coincident and lagging.

Question 30

A seasonal factor would be a change in consumer tastes that occurs progressively over time.

Question 31

Cyclical factors are related to fluctuations in the general level of economic activity.

Question 32

Seasonal factors are concerned with a specific season of the year.

Question 33

Trend analysis is a forecasting technique that relies primarily on historical data to predict the future.

Question 34

Variables whose changes typically follow changes in other economic variables are called lagging indicators.

Question 35

Cross-section data are observations of a particular variable over a number of time periods.

Question 36

Cross-section data are observations of a particular variable at a specific point in time.

Question 37

Autoregressive integrated moving average ARIMA) models are a general class of models used in forecasting time series based on the hypothesis that adequate forecasts of future values of a time series can be obtained based solely on past information of the series.

Question 38

Variables whose current changes give an indication of future changes in other variables are called leading indicators.

Question 39

When using trend analysis, a forecaster might predict the dollar value of future sales by sketching a line that appears to "best fit" the historical data.

Question 40

Time series data are observations of a particular variable over a number of time periods.

Question 41

All of the following are examples of seasonal factors EXCEPT:

A) Increase in shovels sold over time
B) Increase in seeds sold in the spring
C) Increase in rakes sold in the fall
D) Increase in deicer sold in the winter
E) Increase in sprinklers sold in the summer

Question 42

A set of economic variables whose changes in value roughly coincide with changes in other economic variables are called:

A) simultaneous variables.
B) leading indicators.
C) coincident indicators.
D) composite indicators.
E) lagging indicators.

Question 43

The method of forecasting that can utilize large number of equations to describe many of the economic relationships in an entire country is called:

A) trend analysis.
B) barometric forecasting.
C) an econometric model.
D) an input-output analysis.
E) a survey.

Question 44

A set of economic variables whose changes in value typically follow changes in other economic variables are called:

A) following variables.
B) leading indicators.
C) coincident indicators.
D) composite indicators.
E) lagging indicators.

Question 45

Factors which reflect movements in economic variables over time are:

A) cyclical factors.
B) seasonal factors.
C) trend factors.
D) cross-sectional factors.
E) time series factors.

Question 46

Consumption goods with an expected useful life of at least three years are:

A) durable goods.
B) nondurable goods.
C) services.
D) investment goods.
E) noninvestment goods.

Question 47

Econometric models have two types of equations - behavioral equations and identities.

Question 48

Government expenditures are expenditures for goods and services by state and local governments and the federal government, and include all of the following items EXCEPT:

A) national defense goods .
B) wages for fire fighters.
C) welfare payments.
D) wages for state judges.
E) wages for teachers.

Question 49

The method of forecasting that relies primarily on historical data to predict the future is called:

A) trend analysis.
B) barometric forecasting.
C) an econometric model.
D) an input-output analysis.
E) a survey.

Question 50

A set of economic variables whose fluctuations in value consistently precede similar fluctuations in other economic variables are called:

A) predictor variables.
B) leading indicators.
C) coincident indicators.
D) composite indicators.
E) lagging indicators.

Question 51

The use of current values of certain economic variables called indicators to predict the future value of other indicators is called:

A) trend analysis.
B) barometric forecasting.
C) an econometric model.
D) an input-output analysis.
E) a survey.

Question 52

The correct order of the business cycle is:

A) peak, trough, contraction, expansion
B) trough expansion, contraction, peak
C) contraction, expansion, trough, peak
D) peak, contraction, trough, expansion
E) expansion, trough, peak, contraction

Question 53

Factors which are related to fluctuations in the general level of economic activity are:

A) cyclical factors.
B) seasonal factors.
C) trend factors.
D) cross-sectional factors.
E) time series factors.

Question 54

Factors which are concerned with a specific season of the year are:

A) cyclical factors.
B) trend factors.
C) cross-sectional factors.
D) time series factors.
E) seasonal factors.

Question 55

Consumer spending on consumption goods which cannot be stored but must be consumed at the point of production are:

A) durable goods.
B) nondurable goods.
C) services.
D) investment goods.
E) noninvestment goods.