For an economy as a whole income must equal

7. For an economy as a whole, income must equal expenditure because
a. every dollar of saving by some consumer is a dollar of spending by some other consumer.
b. individuals can only spend what they earn each period.
c. every dollar of spending by some buyer is a dollar of income for some seller.
d. the number of firms is equal to the number of households in an economy.
8. If an economy’s GDP falls, then it must be the case that the economy’s 9. If an economy’s GDP rises, then it must be the case that the economy’s 10. In the actual economy, households
11. In the actual economy, households
a. cannot be computed as either the revenue firms receive or the payments they make to
factors of production.
b. can be computed as the revenue firms receive from the sales of goods and services but
not as the payments they make to factors of production.
c. can be computed as either the revenue firms receive from the sales of goods and
services or the payments they make to factors of production.
d. can be computed as payments firms make to factors of production but not as revenues
they receive from the sales of goods and services.
12. Which of the following is a way to compute GDP?
13. Angus the sheep farmer sells wool to Barnaby the knitter for $20. Barnaby makes two
sweaters, each of which has a market price of $40. Collette buys one of them, while the
other remains on the shelf of Barna by’s store to be sold later. What is GDP here?