GDP - C h a p t e r 5 4) MEASURING GDP AND ECONOMIC GROWTH*...

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155 5 MEASURING GDP AND ECONOMIC GROWTH* * This is Chapter 21 in Economics . ± Gross Domestic Product Topic: GDP Skill: Recognition 1) Gross domestic product is the total ____ pro- duced within a country in a given time period. A) market value of all final and intermediate goods and services B) market value of all final and intermediate goods and services plus investment and depreciation C) amount of final and intermediate goods and ser- vices D) market value of all final goods and services Answer: D Topic: Circular Flow Skill: Conceptual 2) The circular flow diagram shows A) how nominal GDP is distinct from real GDP. B) how the prices of factors are determined. C) the effects of inflation in a simple economy. D) the flows between different sectors of the econ- omy. Answer: D Topic: Circular Flow Skill: Conceptual 3) The circular flow diagram indicates that A) households sell the services of factors of produc- tion to firms. B) firms buy the services of factors of production from the government. C) households sell goods and services to the gov- ernment. D) firms buy goods and services from households. Answer: A Topic: Circular Flow Skill: Conceptual 4) In the circular flow model of an economy with no government sector and no international trade, households A) receive income from buyers of goods and ser- vices. B) receive income from the sale of factors in the goods markets. C) pay firms for the use of their factors. D) receive income from producers for the use of factors in the factor markets. Answer: D Topic: Circular Flow, Aggregate Expenditure Skill: Conceptual 5) In the circular flow diagram, aggregate expendi- ture includes the sum of A) saving and investment. B) consumption and investment. C) consumption, investment, and saving. D) income and saving. Answer: B Topic: Circular Flow, Aggregate Expenditure Skill: Conceptual 6) In the circular flow of economic activity A) aggregate expenditure measures the dollar value of purchases of factors. B) aggregate expenditure measures the dollar value of purchases of final goods and services. C) aggregate income measures the dollar value of labor resources only. D) aggregate expenditure is measured as it moves through the financial markets. Answer: B Chapter
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156 CHAPTER 5 Topic: Government Budget Deficit Skill: Recognition 7) The government’s budget deficit is the excess of government A) purchases of goods and services over its interest payments on the government debt. B) purchases of goods and services over its net taxes. C) net taxes over its purchases of goods and ser- vices. D) interest payments on the government debt over its net taxes. Answer: B Topic: Rest of the World Sector Skill: Conceptual 8) If U.S. imports are less than U.S. exports, the A) rest of the world borrows from the U.S. econ- omy. B)
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This note was uploaded on 03/11/2012 for the course ECON 104 taught by Professor Ismailov during the Spring '11 term at London College of Accountancy.

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GDP - C h a p t e r 5 4) MEASURING GDP AND ECONOMIC GROWTH*...

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