Module 10

Question 1

Keep track of the flows of money among different sectors of the economy

Answer 1

National Income, Personal Accounts/National Accounts

Question 2

A person or group of people who share income

Answer 2

Household

Question 3

An organization that produces goods and services for sales

Answer 3

Firm

Question 4

Where goods and services are bought and sold

Answer 4

Product Markets

Question 5

Resources, especially labor and capital, are bought and sold

Answer 5

Factor Markets

Question 6

Household spending on goods and services

Answer 6

Consumer Spending

Question 7

A share in the ownership of a company held by a shareholder

Answer 7

Stock

Question 8

A loan in the form of an IOU that pays interest

Answer 8

Bond

Question 9

Parents the the government makes to individuals without expecting a good or service in return

Answer 9

Government transfers

Question 10

Equal to income plus government transfers minus taxes, the total amount of household income available to spend on consumption and save

Answer 10

Disposable Income

Question 11

Equal to disposable income minus consumer spending, is disposable income that is not spent on consumption

Answer 11

Private Savings

Question 12

Banking, stock, and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing

Answer 12

Financial Markets

Question 13

Total expenditures on goods and services by federal, state, and local governments

Answer 13

Government purchases of goods and services

Question 14

Amount of funds borrowed by the government in the financial markets

Answer 14

Government Borrowing

Question 15

Goods and services sold to other countries

Answer 15

Exports

Question 16

Goods and services purchased from other countries

Answer 16

Imports

Question 17

Stocks of goods and raw materials held to facilitate business operations

Answer 17

Inventories

Question 18

Spending on raw, productive, physical capital, such as machinery and structures, or changes in inventories

Answer 18

Investment Spending

Question 19

Goods and services sold to the final, or end, user

Answer 19

Final Goods and Services

Question 20

Goods and services bought from one firm to be used as inputs into the production of final goods and services

Answer 20

Intermediate goods and services

Question 21

The total value of all final goods and services produced in the economy during a given year

Answer 21

Gross Domestic Product (GDP)

Question 22

For calculating GDP, survey firms and add up their contributions to the value of final goods and services

Answer 22

Value-added approach

Question 23

To calculating GDP is to add up aggregate spending on domestically produced final goods and services in the economy - the sum of consumer spending, investment spending, government purchases of goods and services and exports minus imports

Answer 23

Expenditure Approach

Question 24

The total spending on domestically produced final goods and services in the economy - is the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports

Answer 24

Aggregate Spending

Question 25

To calculating GDP is to add up the total factor income earned by households from firms in the economy, including rent, wages, interest, and profit

Answer 25

Income Approach

Question 26

Of a producer, is the value of its sales minus the value of its purchases of inputs

Answer 26

Value added of a producer

Question 27

The difference between the value of exports and the value of imports (X-IM)

Answer 27

Net exports