40 questions (80 points)
1. How can we tell the difference between a stock and a flow? Choose the best answer.
A stock is measured in dollars. A flow is measured in dollars per year.
A stock is a quantity that is measured over an interval of time. A flow is a quantity that is measured at
a point in time.
A stock is a quantity that is measured at a point in time. A flow is a quantity that is measured over an
interval of time.
Any variable that can be recorded at a point in time is a stock. All other variables are flow variables.
2. Which of the following is a transaction in the US Goods Market?
3. Jane has $2000 in her bank account at the end of July. She earns $2000 in August from her job. She
spends $1800 on rent and food. She has no o
ther assets or liabilities. Jane’s savings during August are
____ and her wealth at the end of August is ______.
4. Joe’s Coffee Shop has a building and equipment worth 100,000 in Jan. 2014.
The existing buildin
and equipment depreciate 2% over the year. Joe buys a new expresso machine and other equipment in
Dec. 2014 worth $10,000. What is Joe’s
net investment during 2014? (note: the expresso machine and
new equipment do not depreciate in December)
5. Which of the following flows does not represent a factor payment?
(i) General Motors builds a new factory
(ii) General Motors buys new robotic equipment for its manufacturing facility
(iii) General Motors pays its workers’ salaries
(i) and (ii)
(i) and (iii)