Measures of economic performance: Practice Questions

A country experiences two consecutive quarters of negative economic growth. This macroeconomic condition is best defined as:

Which of the following would be recorded as a credit item on the current account of the balance of payments for the United Kingdom?

An economy is experiencing a negative output gap. Which of the following combinations of policy changes is most likely to result in the closing of this gap through an increase in aggregate demand?

Which measure of economic performance calculates the total value of all goods and services produced by the factors of production owned by a country's citizens, regardless of where they are located?

The table below shows the Consumer Price Index (CPI) for an economy over three years:

What was the annual rate of inflation in Year 3?

State the definition of a recession as used by macroeconomists to measure economic performance.

Explain why the use of Purchasing Power Parities (PPPs) is preferred over market exchange rates when comparing the real GDP per capita of two different countries.