Please answer all the questions. Thank you. 1. You are shown the statements below. Which of them is/are true? Statement 1: The business cycle is always measured using the gross national product (GNP) rather than gross domestic product (GDP). Statement 2: Purchases of new equipment (gross fixed capital formation) are a major component of investment. Statement 3: Investment is less stable than consumption spending by households. A.All three statements are true. B. Only Statement 3 is true. C. Statements 1 and 3 are true. D. Statements 2 and 3 are true. E. None of the statements is true. 2. You are shown the statements below. Which of them is/are true? Statement 1: When the financial account balances, the merchandise trade balance will be the same as the current account balance. Statement 2: Exports of goods and services are recorded in the financial account of the balance of payments. Statement 3: Income derived from holding financial investments flow through the current account. A. Statement 1 and Statement 2 B. Statement 1 and Statement 3 C. Statement 1 D. Statement 3 E. Statement 1, Statement 2, and Statement 3 3. A South African bank buys British government bonds from the UK treasury, A. the South African financial account is debited and Britain’s financial account is credited. B. the South African current account is debited. C. the South African financial account is debited. D. Britain’s financial account is credited. E. the South African current account is credited.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Please answer all the questions. Thank you.

1. You are shown the statements below. Which of them is/are true?

Statement 1: The business cycle is always measured using the gross national product (GNP) rather than gross domestic product (GDP).
Statement 2: Purchases of new equipment (gross fixed capital formation) are a major component of investment.
Statement 3: Investment is less stable than consumption spending by households.

  • A.All three statements are true.
  • B. Only Statement 3 is true.
  • C. Statements 1 and 3 are true.
  • D. Statements 2 and 3 are true.
  • E. None of the statements is true.

2. You are shown the statements below. Which of them is/are true?

Statement 1: When the financial account balances, the merchandise trade balance will be the same as the current account balance.
Statement 2: Exports of goods and services are recorded in the financial account of the balance of payments.
Statement 3: Income derived from holding financial investments flow through the current account.

  • A. Statement 1 and Statement 2
  • B. Statement 1 and Statement 3
  • C. Statement 1
  • D. Statement 3
  • E. Statement 1, Statement 2, and Statement 3

3. A South African bank buys British government bonds from the UK treasury,

  • A. the South African financial account is debited and Britain’s financial account is credited.
  • B. the South African current account is debited.
  • C. the South African financial account is debited.
  • D. Britain’s financial account is credited.
  • E. the South African current account is credited.
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