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Unformatted text preview: Page 1 Practice Problems for Quiz 1 ECO4203 Fall 2010 Dr. Norrbin 1. The total income of everyone in the economy is exactly equal to the total: A) expenditure on the economy's output of goods and services. B) consumption expenditures of everyone in the economy. C) expenditures of all businesses in the economy. D) government expenditures. 2. When a firm sells a product out of inventory, investment expenditures ______ and consumption expenditures ______. A) increase; decrease B) decrease; increase C) decrease; remain unchanged D) remain unchanged; increase 3. Assume that a bakery hires more workers and pays them wages and that the workers produce more bread. GDP increases in all of the following cases except when the bread: A) is sold to households. B) is stored away for later sale. C) grows stale and is thrown away. D) is sold to other firms. 4. To avoid double counting in the computation of GDP, only the value of ______ goods are included....
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- Spring '11