Macroeconomics 2.01: The Circular Flow and GDP

Which of the following would be added to the gross domestic product of the United States?

$800 million increase in business inventories

According to the circular flow model, which of the following should always be equal?

Total income and total expenditures in an economy

Which method for counting gross domestic product focuses on the money paid for all the factors of production as well as profits earned by business owners?

The income approach

In a given year, businesses invest $2 trillion, exports total $1.5 trillion, imports total $3 trillion, consumers spend $5 trillion, and the government spends $1.5 trillion on final goods and services. Based on this, which of the following statements is true?

The total value added in the economy for that year must equal $7 trillion.

The table below shows the dollar value of sales and intermediate purchases for a small island country's three primary industries. Which of the following statements about these manufacturers is accurate?

The total value added by the hardwood board and woven basket manufacturers is $15 million.