1) If a nation's real GDP has increased faster that its population over a period of time, then we would conclude that: real GDP per capita increased faster than real GDP population grew slower than real GDP per capita real GDP per capita increased slower than real GDP real GDP per capita must have decreased
2) Which of the following is a private transfer payment? Unemployment benefits received by newly laid-off workers The sale of used clothing at a thrift store The Social Security benefits sent to a retired worker A check for $250 sent by a parent to a daughter at college
3) The total volume of business sales in our economy is several times larger than GDP because: The GDP does not take taxes into account The GDP excludes intermediate transactions The GDP grossly understates the value of our annual output Total sales are in money terms and GDP is always stated in real terms
4) All of the following are examples of intermediate goods, except: Flour bought by a bakery Oven bought by a bakery Office supplies bought by an accounting firm Gasoline bought by a trucking company
5) The expenditures or output approach to GDP measures it by summing up: -Compensation of employees, rents, interest, dividends, undistributed corporate profits, proprietors' income, indirect business taxes paid, consumption of fixed capital, and net foreign factor income earned in the United States. -Compensation of employees, rents, interest, dividends, corporate profits, proprietors' income, and indirect business taxes, and subtracting the consumption of fixed capital. -The total spending for consumption, investment, net exports, and government purchases -The total spending for consumption and government purchases, but subtracting public and private transfer payments
6) In the reservoir analogy of stock and flow for the economy: Gross investment is an outflow and depreciation is an inflow The stock of capital is an outflow and depreciation is an inflow Net investment is an inflow and the stock of capital is an outflow Gross investment is an inflow and depreciation is an outflow