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Unformatted text preview: P RACTICE RACTICE Q Q UESTIONS UESTIONS 1. Which of the following is a flow variable? A. The value of the house in which you live B. The balance in your savings account C. Your monthly consumption of hamburgers D. The number of hamburgers in your refrigerator at the beginning of the month 2. Which of the following is not a stock variable? A. Government debt B. The labor force C. The amount of money held by the public D. Inventory investment 3. GDP is A. a stock. B. a flow. C. both a stock and a flow. D. neither a stock nor a flow. 4. GDP measures A. expenditure on all final goods and services. B. total income of everyone in the economy. C. total value-added by all firms in the economy. D. all of the above. 5. Suppose that a farmer grows wheat and sells it to a baker for $1, the baker makes bread and sells it to a store for $2, and the store sells it to the customer for $3. This transaction increases GDP by A. $1. B. $2. C. $3. D. $6. 6. Which of the following is not included in GDP? A. The salary paid to a federal judge B. The value of housing services enjoyed by homeowners C. The value of automobile services enjoyed by car owners D. The value-added of a shipping company that transports goods from the factory to retail stores 7. In which case is total expenditure in an economy not equal to total income? A. if total saving is larger than total investment B. if net exports are not zero C. if inventory investment is negative D. none of the above--they are always equal 8. All other things equal, GDP will rise if A. imports rise....
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- Summer '10