MACROECONOMICS TEST WITH Q & A.

MACROECONOMICS TEST WITH Q & A. Microeconomics - CORRECT ANSWER-The study of individual household and firm behaviour, individual markets and industries Macroeconomics - CORRECT ANSWER-The study of aggregate behaviour at the country or world level income must equal expenditure because - CORRECT ANSWER-- Every transaction has a buyer and a seller. - Every dollar of spending by some buyer is a dollar of income for some seller. Circular flow diagram - CORRECT ANSWER- Gross domestic product (GDP) - CORRECT ANSWER-is a measure of the income and expenditures of an economy; it is the total market value of all final goods and services produced within a country in a given time period Six important features of GDP - CORRECT ANSWER-• Market prices. • Final goods, not intermediate goods. • Goods and services. • Only goods and services currently produced. • Production within the geographic confines of a country. • Production within a specific interval of time. GDP formula - CORRECT ANSWER-Y=C+I+G+NX Y - CORRECT ANSWER-output/GDP C - CORRECT ANSWER-consumption; the spending by households on goods and services. Ig - CORRECT ANSWER-investment; the spending on capital equipment, structures and inventories G - CORRECT ANSWER-government purchases; the spending on goods and services by local and central governments (excluding transfer payments). NX