Pre-Test Chap 24 e18 - Pre-Test Chap 24 e18 Student: _ 1....

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Pre-Test Chap 24 e18 Student: ___________________________________________________________________________ 1. Refer to the above data. Personal income is equal to: A. $8,348 billion B. $8,899 billion C. $9,053 billion D. $10,446 billion (The following national income data for an economy are in billions of dollars.) 2. Refer to the above data. Net domestic product is: A. $3,213 billion B. $3,550 billion C. $3,628 billion D. $3,988 billion
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3. In an economy, the total expenditure for a market basket of goods in year 1 (the base year) was $10,000 billion. In year 2, the total expenditure for the same market basket of goods was $10,500 billion. What was the GDP price index for the economy in year 2? A. 1.05 B. 1.10 C. 1.20 D. 1.50 4. GDP tends to underestimate the productive activity in the economy because it excludes: A. Spending by the government on military goods B. Spending by businesses to reduce the level of pollution C. The work done by construction companies to remodel homes D. The personal labor time homeowners spend on home repairs 5. GDP is the total market value of: A. All expenditures on natural resources, labor, and capital goods in an economy in a given year B. All expenditures on consumption, investment, and net exports in an economy in a given year C. All intermediate goods and services produced in an economy in a given year D. All final goods and services produced in an economy in a given year 6. Disinvestment occurs when: A. Businesses sell machinery and equipment to one another B. The prices of investment goods rise faster than the prices of consumer goods C. Businesses have larger inventories at the end of the year than they had at the start D. The consumption of private fixed capital exceeds private domestic investment 7. The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($1,050);
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Pre-Test Chap 24 e18 - Pre-Test Chap 24 e18 Student: _ 1....

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