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Lecture 4: Study Quiz

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This quiz only covers the content of Lecture 4!
Jocelyn Granger
Quiz by Jocelyn Granger, updated more than 1 year ago
Jocelyn Granger
Created by Jocelyn Granger about 9 years ago
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Resource summary

Question 1

Question
Business firms box includes:
Answer
  • Non-Profit organizations, government agencies, and home owners
  • Savings, expenses, and capital
  • Investments and Intermediate goods & services
  • Construction, labor, and land

Question 2

Question
Intermediate goods and services include:
Answer
  • Government agencies, non-profit organizations, and home owners
  • Components (parts and materials - chemicals, metal, etc), temporary personnel agencies (cleaning, custodian services)
  • Imputation of the value of living
  • Investments of businesses and savings

Question 3

Question
Personal Savings is a:
Answer
  • A net of customer borrowing and drawdown of previously accumulated customer savings.
  • All of the answers are true.
  • It is negative in the case of dissaving.
  • It equals disposable personal income minus consumer spending.

Question 4

Question
Why does the implication of Gross Domestic Product equaling Gross National Product imply that the net flow of foreign income is zero?
Answer
  • The net inflow of foreign income equals the Gross National Income minus the Gross Domestic Product.
  • Gross Domestic Product equals Gross National Income plus the net inflow of foreign income.
  • None of the answers are correct.
  • Gross National Income equals Gross Domestic Product plus the net inflow of foreign income.

Question 5

Question
The Net Inflow of Foreign Income include:
Answer
  • Net return to foreign assets.
  • Net return to foreign labor.
  • Net return to foreign land.
  • Net return to foreign workers.

Question 6

Question
Arrows omitted from the diagram to avoid excessive clutter are:
Answer
  • Imported Immediate Goods and services.
  • Foreign land and assets.
  • Business loans and mortgage loans.
  • Foreign labor and markets.

Question 7

Question
The currency markets not shown would include:
Answer
  • X and M International Financial Capital.
  • Change in international reserves.
  • Net inflow of foreign income.
  • Imported intermediate goods and services.

Question 8

Question
Inventory refers to:
Answer
  • Items that haven't been produced or sold.
  • Items that have been produced and sold.
  • Items that have been produced but not yet have been sold.
  • None of the answers are true.

Question 9

Question
It is not possible to produce services without a buyer but it is possible to produce goods without a buyer.
Answer
  • True
  • False

Question 10

Question
What must we distinguish between in the diagram?
Answer
  • Production and spending in the diagram.
  • The GDP measures production while the GDP minus INV equals spending.
  • All of the above.
  • None of the above.

Question 11

Question
It is not possible for production to be either greater or smaller than spending.
Answer
  • True
  • False

Question 12

Question
Inventories serves as a reservoir between production and sales.
Answer
  • True
  • False

Question 13

Question
When does an unplanned change in inventory happen?
Answer
  • When the net inflow of foreign incomes starts to vary.
  • Whenever the number of GDP changes.
  • Whenever variables in the supply and the demand curve change.
  • Whenever sales exceed or fall short of expectation.

Question 14

Question
What is an example of physical capital?
Answer
  • Building.
  • Knowledge.
  • Money.
  • Education.

Question 15

Question
What is an example of human capital?
Answer
  • Land.
  • Money.
  • Factory.
  • Education.

Question 16

Question
What is an example of financial capital?
Answer
  • Labor
  • Money
  • Land
  • Knowledge.

Question 17

Question
National Income is paid to people for providing inputs to the producing entities:
Answer
  • Earned income or employee compensation.
  • Rent for natural resources such as a land and mineral rights.
  • Interest for financial capital.
  • Profits paid out to the owners of the physical capital.
  • Investment

Question 18

Question
Why is investment important?
Answer
  • It fluctuates up and down and pulls the economy along with it.
  • It increases the production capacity of the economy.
  • It introduces new technology to the economy.
  • It increases the productivity of workers.

Question 19

Question
The difference between macro and the micro meaning of investment is for a business, investment is the acquisition of additional physical capital, which could be either newly created or bought used from a business, and only the former is investment from the macro point of view.
Answer
  • True
  • False

Question 20

Question
What is the best answer that describes the meaning of disinvestment?
Answer
  • When you invest in a business and it becomes a deficit.
  • When you don't invest in a business
  • If a business buys a used machine from another business then the productive capacity rises for one business but falls for the other business.
  • All of the answers are true.

Question 21

Question
Sale by one person to another person of stock is an investment.
Answer
  • True
  • False

Question 22

Question
In the National Economic Accounts in Change in Inventories is counted as a part of Investment.
Answer
  • True
  • False

Question 23

Question
Spending on education and job training creates human capital and is an example of:
Answer
  • Government Spending
  • Consumer Spending
  • Investment

Question 24

Question
Spending on infrastructure projects such as roads and airports are an example of:
Answer
  • Government Spending
  • Investment
  • Consumer Spending

Question 25

Question
Construction of new houses is an example of:
Answer
  • Government Spending
  • Consumer Spending
  • Investment

Question 26

Question
Investment goods are considered to be a final good and productions of investment goods counts in GDP.
Answer
  • True
  • False

Question 27

Question
How are investment goods and intermediate goods and services similar?
Answer
  • Both are bought by business firms and other business firms.
  • All of the above.
  • Both are used in production.
  • None of the above.

Question 28

Question
Why are intermediate goods and services and investment goods treated differently when it comes to GDP?
Answer
  • The number of input.
  • Their effect on the economy.
  • Their number of contributed outputs and their productive lifetime.
  • Their value.

Question 29

Question
Fixed Investment Includes:
Answer
  • Non-residential fixed investment
  • Foreign-trade fixed investment
  • Changes inventory
  • residential fixed investment

Question 30

Question
One reason to divide GDP into its components is to facilitate the explanation of the size of GDP and the changes that occur over time.
Answer
  • True
  • False

Question 31

Question
What is one type of comparison that is used today for GDP?
Answer
  • USA today versus the USA earlier in history.
  • Foreign Countries versus foreign countries.
  • Canada versus China.
  • All of the above.

Question 32

Question
What are some adjustments required to create a fair comparison of GDP?
Answer
  • Use real GDP to adjust for inflation.
  • Use components of GDP use to create division to monitor changes.
  • Using different components to respond to different influences.
  • Use per capita GDP to adjust differences in population size.

Question 33

Question
What is ignored by GDP?
Answer
  • Pollution
  • Working Conditions
  • Labor and marketing laws
  • Depletion of Natural Resources
  • Leisure time
  • Building nuclear bombs.

Question 34

Question
The Underground Economy is reported for calculations of GDP.
Answer
  • True
  • False

Question 35

Question
Household work and child care are not counted in the GDP.
Answer
  • True
  • False
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