Title: QUIZ: GDP Explained -- Fed Explained Video Series
Course: Kelly's Copy-Export Course > Section: GDP Explained -- Fed Explained Video Series

Q: The two main economic goals pursued by the Federal Reserve (and often called the dual mandate) are
- economic security and economic growth.
- price stability and maximum employment.
- economic stability and economic freedom.
- maximum employment and economic security.
A: price stability and maximum employment.

Q: How often do government statisticians compute our country’s GDP?
- Every month 
- Every six months 
- One time per year
- Every three months
A: Every three months

Q: Which of the following activities would be included in the country’s GDP?
- Cutting someone’s hair at home in exchange for lawn mowing 
- Fixing a customer’s car at the auto repair shop
- Washing the dishes after dinner at home
- Donating cupcakes for a bake sale 
A: Fixing a customer’s car at the auto repair shop

Q: Which of the following items would lower the potential GDP of a country?
- New technology lowers the cost of production machinery
- Fewer people complete high school and college leading to lower worker productivity 
- Elderly workers begin to retire later and stay in the workforce longer
- A national recession lowers the number of goods and services produced in the economy 
A: Fewer people complete high school and college leading to lower worker productivity 

Q: When the economy is operating below potential GDP, the Federal Reserve is most likely concerned with
- a rising price level.  
- increasing inflation.
- high levels of unemployment.
- shortages of necessary goods like energy and food.
A: high levels of unemployment.

Q: Real gross domestic product (RGDP) can best be defined as
- the average of all the prices of goods and services produced in the economy.
- the percent change in the price level of all goods and services produced in an economy in a given period of time.
- the total value of all final goods and services produced in an economy in a given time period adjusted for inflation.
- the value of all final goods and services that could be produced in an economy in a given time period if all its capacity was utilized.
A: the total value of all final goods and services produced in an economy in a given time period adjusted for inflation.

Q: An economy producing below its potential GDP most often results from
- high prices of production inputs.
- corrupt government policies that stifle economic growth.
- low consumer demand for goods and services in the economy.
- loss of consumer purchasing power due to a high inflation rate in the economy.
A: low consumer demand for goods and services in the economy.

Q: Production done at home is not counted in gross domestic product because
- economists want people to work at companies, not at home.
- there is no market price to calculate for work done for oneself.
- production done at home is not valuable to anyone except the person doing it.
- goods produced at home lack the quality found in the commercial market.
A: there is no market price to calculate for work done for oneself.

Q: When the economy is operating above its potential GDP, the Federal Reserve will most likely
- increase the amount of dollars in circulation to boost economic activity.
- decrease the amount of dollars in circulation to keep inflation under control.
- pursue policies designed to decrease the unemployment rate in the economy.
- do nothing since the economy is performing even better than everyone expected.
A: decrease the amount of dollars in circulation to keep inflation under control.