V d ostofproductionminusthecostsoflabourandcapital c

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Unformatted text preview: stment. g 7) o calculate the change in the value of inventories for the investment T 7) _______ component of GDP, one should use their A) arket value at the time they were produced. m B) ost of production at the time they were produced. c C) alue at the time the goods are sold and removed from inventory. v D) ost of production minus the costs of labour and capital. c E) urrent market value. c 8) ne major reason that GDP is an inaccurate measure of the true level of 8) _______ O economic activity is that A) t is statistically very inaccurate. i B) t cannot be adjusted for changes in prices. i C) t does not include non-market activities. i D) eople frequently buy things they do not want. p E) ll of the above a 9) hich of the following is included in the current calculations of GDP? W 9) _______ A) izza purchased by college students for dinner P B) olunteer work undertaken by Mary Smith V C) he purchase of a second hand automobile T D) he purchase of a 1939 painting T E) elfare payments W 10) he aggregate consumption function is based on a number of T 10) ______ assumptions. Given these assumptions, which of the following statements is true? A) he MPC is greater than zero and less than one, and the APC falls T as income rises. B) elow a certain level of income, APC > 1 and MPC < 0. B C) he MPC and APC are always less than unity. T D) s income rises, the MPC falls and the APC rises. A E) he APC is greater than zero and less than one, and the MPC falls T as income rises. Consider the following information describing a closed economy with no government and where aggregate output is demand determined: TABLE 21-1 11) efer to Table 21-1. At the equilibrium level of national income, desired R saving will be A) ero. z B) 40. $ C) 70. $ D) 200. $ E) 240. $ 11) ______ FIGURE 21-3 12) efer to Figure 21-3. Assuming AE0 to be the prevailing aggregate R 12) ______ expenditure function, the distance 0A is a measure of A) esired investment. d B) utonomous desired expenditures. a C) nduced expenditures. i D) esired saving. d E) ggregate expenditure at equilibrium national income. a 13) onsider an aggregate consumption function in a simple macro model C 13) ______ with government and taxes. Given a marginal propensity to consume out of disposable income of 0.9 and a net tax rate of 10 percent of national income, the marginal propensity to consume out of natio...
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