PE 23 Flashcards
Expenditures on a nation’s domestic production
a. Are less than its domestic production
b. Are equal to its domestic production
c. Are greater than its domestic production
d. Could be less than, equal to, or greater than its domestic production
b. Are equal to its domestic production
Income generated by a nation’s domestic production
a. Is less than its domestic production
b. Is equal to its domestic production
c. Is greater than its domestic production
d. Could be less than, equal, or greater than its domestic production
b. Is equal to its domestic production
For an economy as a whole
a. Wages must equal profit
b. Consumption must equal income
c. Income must equal expenditure
d. Consumption must equal saving
c. Income must equal expenditure
For an economy as a whole
a. The market value of production must equal expenditure
b. Investment must equal the value of stocks and bonds purchased
c. Wages must equal income
d. Consumption must equal saving
a. The market value of production must equal expenditure
In the GDP accounts production equals
a. Income
b. Income + saving
c. Income - government expenditures
d. Income - imports
a. Income
Because every transaction has a buyer and a seller
a. GDP is more closely associated with an economy’s income than it is with an economy’s expenditure
b. Every transaction contributes equally to an economy’s income and to its expenditure
c. The number of firms must be equal to the number of households in a simple circular-flow diagram
d. Firm’s profits are necessarily zero in a simple circular-flow diagram
b. Every transaction contributes equally to an economy’s income and to its expenditure
Which of the following statements about GDP is correct?
a. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate of the economy’s labor force
b. Money continuously flow from households to government and then back to households, and GDP measures this flow of money
c. GDP is to a nation’s economy as household income is to a household
d. All of the above are correct
c. GDP is to a nation’s economy as household income is to a household
(GDP đối với nền kinh tế của một quốc gia cũng giống như thu nhập đối với một hộ gia đình.)
GDP measures the total income of an economy, just like household income represents the financial well-being of a household. It reflects the economic performance of a country, similar to how income reflects the financial situation of a family.
b. While GDP accounts for economic transactions, it does not specifically measure only the flow of money between households and the government. It includes spending from businesses, government, and the international trade.
In a simple circular-flow diagram, total income and total expenditure are
a. Never equal because total income always exceeds total expenditure
b. Seldome equal because of the ongoing changes in an economy’s unemployment rate
c. Equal only when the government purchases no goods or services
d. Always equal because every transaction has a buyer and a seller
d. Always equal because every transaction has a buyer and a seller
In a simple circular-flow diagram
a. Households spend all of their income
b. All goods and services are bought by households
c. Expenditures flow through the markets for goods and services, while income flows through the markets for the factors of production
d. All of the above are correct
d. All of the above are correct
a. In the simpliest model, there are no savings, taxes, or international trade. This means households use all their income to buy goods and services, keeping the circular flow intact
b. Since the government and foreign sectors are not included in this simple model, all goods and services produced by firms are assumed to be purchased by households
c. Households spend money in the goods and services market -> firms receive revenue. Firms pay household for labor and other inputs in the factor market -> household receive income
