MEcons Tutorial 1.docx - Tutorial 1 Measuring National...

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Tutorial 1: Measuring National Income 1. Which model is used to show the flows of money, factors of production, and goods and services in the economy? A. The Phillips curve model B. The model of production possibilities C. The circular-flow model D. The AD-AS model E. The rational expectations model
2. A household spends money on ___________ and in exchange sells _______ to firms.
3. GDP measures ________________________________. I. production II. income earned during the production process III. spending by consumers, businesses, governments and foreigners
4. In a specified period of time, a nation’s gross domestic product (GDP) is the _____________.
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5. GDP includes final goods and services, but not intermediate goods because A. intermediate goods are not part of investment spending B. the value of the intermediate goods is already included in the value of the final goods C. the value of the intermediate goods is already included as inventory investment D. intermediate goods are only produced by government E. intermediate goods are not current production
6. Which of the following would be an intermediate good?
7. When computing the value of a nation’s domestic output of goods and services, we can add up all of the income earned by the factors of production in the economy. In this way, we are calculating national output with the ____________________________.
8. When computing the value of a nation’s domestic output of goods and services, we can add up all of the spending done by all sectors in the economy. In this way, we are calculating national output with the _______________________________.

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