Suggested solution: No. Business cycles (which include recessions) will always be part of the economic landscape. Macroeconomic policies are focused on minimizing the length and severity of recessions (contractions in GDP) because recessions carry a significant human cost in terms of lost jobs and other dislocations. (Answers may vary.)

Suggested solution: The expenditures approach to calculating GDP totals all expenditures for final goods and services. The income approach does the same for all forms of income. Because one person’s expenditure is another person’s income, both approaches yield the same result. (Answers may vary.)

Suggested solution: Though GDP per capita does provide some insight into the relative standards of living of countries, it does have some shortfalls in this application. (1) GDP per capita does not take into account income inequality, meaning that the average GDP per capita in one country could be composed of only very rich and very poor people, while a country with the same GDP per capita could have most of the population at the average level. (2) GDP per capita does not capture the informal, or underground, economy. A country with a large underground economy would have an understated GDP per capita. (3) GDP per capita does not include measures of nonmonetary quality of life, such as environmental quality or happiness. Although two countries have about the same GDP per capita and distribution of wealth, perhaps one has a better environment, hence is considered a better place to live. (Answers may vary.)