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/ Homework Answers / Economics / 71) An increase in fixed investment spending that increases GDP

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71) An increase in fixed investment spending that increases GDP occurs when

A) a family purchases a new car.

B) a business buys a new computer.

C) inventories of new cars are drawn down on the lots of car dealers.

D) the government builds a new office building.

72) A capital good is

A) a good that lasts more than three years.

B) a good that is used to make other goods and services.

C) an intermediate product and therefore not part of GDP.

D) a good that should increase in value over time.

73) Capital purchases by businesses of newly produced durables is known as

A) the expenditure approach.

B) the income approach.

C) fixed investment.

D) inventory investment.

74) Changes in the stocks of finished goods and goods in process as well as changes in the raw materials that businesses keep on hand is known as

A) the expenditure approach.

B) the income approach.

C) fixed investment.

D) inventory investment.

75) Fixed investment is

A) the change in stocks of finished goods.

B) the change in the stocks of goods in process.

C) capital purchase by businesses of newly produced durables.

D) purchases by consumers of newly produced consumer durables.

76) An increase in net exports

A) causes GDP to increase.

B) causes GDP to decrease.

C) causes an increase in imports of the same size.

D) can cause GDP to either increase or decrease, depending on whether the exports are durable or nondurable.

77) Net exports equal the

A) total value of all exports.

B) total value of all government produced exports.

C) value of exports minus the value of imports.

D) value of imports minus the value of exports.

78) Using the expenditure approach, GDP is calculated as

A) wages + interest + rent + profits

B) consumption expenditures + wages

C) consumption expenditures + wages + interest

D) consumption expenditures + investment expenditures + government expenditures + net exports

79) The components of GDP using the expenditure method are

A) consumption expenditures, investment expenditures, and government expenditures.

B) consumption expenditures, investment expenditures, government expenditures, and net exports.

C) wages and interest.

D) wages, interest, rents ,and profits.

80) C + I + G + X equals

A) GDP.

B) DPI.

C) NDP.

D) PI.

 

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