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101) GDP can be calculated using

A) the expenditure approach and the production approach.

B) the expenditure approach and the income approach.

C) the expenditure approach and the factor of production approach.

D) the expenditure approach and the resource approach.

102) Why are exports added to (rather than subtracted from) the other expenditure components to arrive at GDP using the expenditure method?

A) because exports account for those goods that were produced in the economy but that were not devoted to domestic consumption, used for domestic investment, or provided as government goods

B) because exports have a higher profit margin for manufacturers than do similar products sold in domestic markets

C) because exported goods are not valued properly, due to problems with the purchasing power parity index

D) because it is only through exporting that we can generate jobs in our own economy

103) Which one of the following is true?

A) Net investment is negative when gross investment is greater than depreciation.

B) Our productive capacity declines when net investment is less than zero.

C) Negative net investment occurs when imports are less than exports.

D) Negative net investment occurs when exports are less than imports.

104) Inventory investment can be defined as

A) changes in the stocks of finished goods and raw materials.

B) the system of accounts that is used to count certain goods.

C) goods that must be excluded from the GDP to avoid double counting.

D) the value of monetary transactions by businesses.

105) Net exports for the United States

A) are always positive numbers.

B) may be negative.

C) are a result of decreasing investment in the manufacturing industries.

D) are a result of decreasing domestic consumption.

106) The expenditure approach to deriving gross domestic product sums the following categories of spending:

A) consumption, investment, government spending, and net exports.

B) consumption, income, government spending, and net exports.

C) consumption, savings, investment, and government spending.

D) consumption, government spending, transfer payments, and net exports.

107) Using the expenditure approach to deriving gross domestic product, if U.S. imports rise and exports remain the same

A) GDP rises.

B) GDP remains the same.

C) GDP falls.

D) GDP indicates a recession.

108) Gross domestic income can be defined as

A) the sum of all incomes earned by all factors of production in a year.

B) the sum of all incomes earned by individuals.

C) the sum of all profits earned by businesses in a year.

D) the sum of all profits earned minus depreciation.

109) The two main approaches to measuring GDP are the

A) concept approach and the reality approach.

B) flow approach and the stock approach.

C) government approach and the consumer approach.

D) income approach and the expenditure approach.

110) What is the proper formula for computing the GDP using the expenditure approach?

A) S + I + G + X

B) C + I + G + X

C) C + O + G + S

D) 0.5(w + r) + k

 

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