UPGRADED ECONOMIC 1002 EXAM QUESTIONS AND ANSWERS

UPGRADED ECONOMIC 1002 EXAM QUESTIONS AND ANSWERS Which of the following measures the economy's overall performance? - CORRECT ANSWER -National income accounting. Aggregate output is the primary measure of the economy's ______. - CORRECT ANSWER -total output of goods and services. In national income accounts, what does value added refer to? - CORRECT ANSWER -The difference in the market value and cost of inputs purchased from other firms. Including the value of _____ (one word) goods along with the value of final goods in the calculation of GDP would amount to multiple counting of goods and distort GDP. - CORRECT ANSWER -intermediate Government transfer payments include all of the following except: - CORRECT ANSWER -wage payments to police officers National _______ accounting measures the overall performance of the economy. - CORRECT ANSWER - income The view of GDP as the sum of money spent on purchases is called the ______ approach. - CORRECT ANSWER -expenditures The primary measure of the economy's performance is its annual total output of goods and services, which is called its ______. - CORRECT ANSWER -aggregate output In order to determine GDP using the expenditures approach, all spending on ______ goods and services, not intermediate goods, is added up. - CORRECT ANSWER -final The market value of a firm's output minus the value of the inputs the firm has bought from others is called ______. - CORRECT ANSWER -value added Gross domestic product calculations count only final goods and services because ______. - CORRECT ANSWER -counting all intermediate goods and services would lead to double-counting of many activities Which of the following is not an example of a personal consumption expenditure? - CORRECT ANSWER - A fighter jet. Social Security payments, welfare payments, and veterans' payments that the government makes directly to households are called government public _____ payments. - CORRECT ANSWER -transfer The view of GDP as the sum of money spent on buying it is called the aggregate ______ approach. (Enter one word for the blank.) - CORRECT ANSWER -expenditure Depreciation of capital is _____. - CORRECT ANSWER -the annual amount allocated to wear and tear on private investment Which of these are components of government purchases in GDP? - CORRECT ANSWER -Expenditures for goods and services that the government consumes in providing public services Expenditures for publicly owned capital Gross domestic product (GDP) may be calculated as the sum of ______. - CORRECT ANSWER -consumer spending, investment spending, government purchases of goods and services, and net exports The term that covers all expenditures by households on goods and services is known as _____ _______ expenditures. - CORRECT ANSWER -personal consumption Using the expenditure approach, which of the following most closely defines the composition of GDP? - CORRECT ANSWER -C + Ig + G + X − M What do economists use to calculate GDP under the income approach? - CORRECT ANSWER -National income. The annual amount allocated to the wear and tear on private investment is called or termed ______. - CORRECT ANSWER -depreciation Under the income approach to GDP, the wages, salaries, and benefits paid by businesses and government fall under the category of compensation of ____ - CORRECT ANSWER -employees For the purposes of GDP accounting, what do government purchases include? - CORRECT ANSWER - Spending on highway construction The purchase of new military equipment (not social security or unemployment insurance payments bc these are transfer payments) Which of the following are components of the expenditure approach to measuring GDP? - CORRECT ANSWER -Personal consumption expenditures Government purchases Gross private domestic investment