For an economy as a whole, a. income must equal expenditure. b. consumption must equal saving. c. consumption must equal income. d. wages must equal profit.
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- Potential GDP refers to a. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are fully employed. b. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are not fully employed. c. an abstract conception developed by economists. d. an unreal expectation of the government.Jane spends $1,200 on a used computer. How will this calculation effect GDP? A.) Consumption will rise and GDP will rise B.) Investment will rise and GDP will rise C.) Since the good was not currently produced consumption will not rise, neither will GDP D.) The GDP deflator will rise but not real GDPClassify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services: Item 1. Packing boxes bought by Amazon.com. Item 2. Starbuck's grande mocha frappuccino bought by a student. Item 3. A new limousine for the president. Item 4. New airplanes bought by United Airlines. Item 1 is and item 2 is O A. an intermediate good; a final good that is consumption expenditure B. a final good that is consumption expenditure; a final good that is consumption expenditure C. a final good that is consumption expenditure; a final good that is investment D. an intermediate good; a final good that is investment Item 3 is and item 4 is O A. an intermediate good; an intermediate good O B. a final good that is government expenditure; a final good that is investment O C. an intermediate good; a final good that is investment D. a final good that is government expenditure; an…
- What is total expenditure in an economy? Total expenditure is equal to expenditure ______. A. on goods and services produced in the economy and goods imported. B. by households, firms, governments, and the rest of the world on goods and services produced in the economy. C. by firms and governments on goods and services produced in the economya. Consider an economy which produces and sells, among a host of other things, 100 million T‑shirts a year. The average T‑shirt begins life when a farmer plants seeds she put away last year, waters them, and harvests the cotton, then sells the cotton to a mill for $0.75, which sells the fabric to a T‑shirt factory for $1.50, which sells its T‑shirts to a wholesaler for $5, who sells it to Nordstrom for $10, which finally sells it to you for $17. Determine the impact of T‑shirts on annual GDP by calculating the value added of the entire production process. b. Now, calculate the amount spent on T‑shirts in a year if 100 million T‑shirts are sold, each for $17. How does this compare to the amount calculated through the value‑added method?Production possibility curve shows ____________. a. All of these b. The output that can be produced by an economy. c. Level of output with minimum wastage of inputs d. Production of two products that are produced by an economy
- 1. Changes in real GDP reflect a. only changes in prices. b. only changes in the amounts being produced. c. both changes in prices and changes in the amounts being produced. d. neither changes in prices nor changes in the amounts being produced.QUESTION 23 Which of the following activities won't be registered at their market values in the current year GDP You clean your apartment You cook for yourself at home chicken parmešan a. b. C. You help a friend studying math for an upcoming exam d. All of the above O a O b d. QUESTION 24 Robert, an American citizen, buys a computer made in China for $1.000 to use in his editing business. Therefore, a. investment increases in $1.000 and net exports decreases in $1.000 b. consumption increases in $1.000 and net exports decreases in $1.000 C. investment increases in $1.000 and net exports increases in $1.000 d. consumption increases in $1.000 and net exports increases in $1.000 O a Ob O cWhich one of the following statement is correct? a.An individual receives more income when he produces more output b.Every individual wants to receive higher income to satisfy more wants c.Higher National Income with no change in population increases standard of living. d.All of these
- An example of a flow variable is a. capital. b. consumption expenditure by households. c. the machinery owned by a firm. d. the cash held by households.Assume that consumption decreases, when interest rates increase. If there is a technological advance that leads to an increase in investment demand, then: A. investment increases and the interest rate rises. B. investment and the interest rate are both unchanged. C. investment is unchanged and the interest rate rises. D. investment decreases and the interest rate rises.1. This expenditure (formerly general government consumption) includes all current government expenditures for purchases of goods and services (including an employee). a. Capital expenditure b. Consumption c. Utilization d. Transfer payments