2

Question 1

A method of inquiry from identifying a problem, proposing alternative tentative answers or
hypotheses

Answer 1

SCIENTIFIC Method

Question 2

When speaking about economic hypothesis they way you phrase your statement is actually
a pretty big deal.

Answer 2

POSITIVE ECONOMICS VERSUS NORMATIVE ECONOMICS

Question 3

deals with what is currently happening like unemployment rate, inflation rate and cut in income tax
improving the incentives to find jobs.

Answer 3

Positive economics

Question 4

Refers to “what ought to be” or “what should be”. “It conveys values, opinions and judgments
about the effects brought by economic practices if there are modifications in the public policies”.

Answer 4

Normative Economics

Question 5

We always get to watch in the television, read some articles in the internet or have heard in the radio that our country has grown or performed well.

Answer 5

MEASURING THE ECONOMY

Question 6

calculates the output of a country’s residents wherever the location of the actual underlying
business’ activity.

Answer 6

GROSS NATIONAL PRODUCT (GNP

Question 7

Formula of GNP

Answer 7

GNP= C + I + G + (X – M)

Question 8

What is C + I + G + (X – M)

Answer 8

C- “Household and Individual Consumption”
I- Investments
G- “Government Expenditure on goods and services including labor”
X- “Exports”
M- “Imports, it is excluded because import products are produced in other economies.”

Question 9

is the aggregate monetary or market value of all the final goods and services created within a nation’s borderline in a certain period.

Answer 9

GROSS DOMESTIC PRODUCT (GDP)

Question 10

The expenditure approach is one of the approaches for quantifying gross domestic product (GDP) that sums up consumption of every households, investment of firms for properties and machineries used for production

Answer 10

GNP/GDP: EXPENDITURE APPROACH vs. INCOME APPROACH

Question 11

As we have mentioned the only main difference between income and expenditure approach is their starting point. GDP using “income approach” quantifies the total earnings received by a certain nation’s household in specific period.

Answer 11

GNP/GDP: INCOME APPROACH

Question 12

This is identified as the earnings that people obtain for providing factors of production namely:
land, labor, capital or entrepreneurship.

Answer 12

FACTOR PAYMENTS

Question 13

refers to the payment household received for land is rental income.

Answer 13

Land: Rent

Question 14

refers to the payment household received in exchange for their labor whether manual labor or
intellectual labor.

Answer 14

Labor: Wages

Question 15

refers to the payment household received for depositing to a financial institution their savings for a
specific span of time.

Answer 15

Capital: Interest

Question 16

refers to the payment household received for operating its business.

Answer 16

Entrepreneurship: Profit

Question 17

The expenditure method is the most utilized system for calculating GDP, which is an indication of the economy’s goods and services created inside a country regardless of who employs the methods to produce and regardless of the location of production.

Answer 17

GNP/GDP: EXPENDITURE APPROACH

Question 18

GDP formula

Answer 18

GDP= C + I + G + (X – M)

Question 19

When consumers buy goods and services this is known to be consumption.

Answer 19

HOUSEHOLDS

Question 20

When the firm spends money on capital goods, it refers to the property, equipment and technology used to produce goods and services this, we called investment.

Answer 20

FIRMS

Question 21

When the government spends money that provides public goods and safety like, infrastructure bridges and highways, education building of public schools and healthcare to the households and firms it is simply called government spending.

Answer 21

GOVERNMENT

Question 22

Money spent by foreigners on our country’s goods and services. Foreigners earn their income in their own country’s resource market but they choose to spent some of those income in our country’s goods and services

Answer 22

FOREIGNERS

Question 23

FACTOR PAYMENTS

Answer 23

Land: Rent
Labor: Wages
Capital: Interest
Entrepreneurship: Profit