chap 2

The national income identity is expressed as: a. output=income b. S = I c. Y= C+I+G+NX

c. Y= C+I+G+NX

what is the most important measure of overall economic performance? a. net national income b. net exports c. gross domestic product

c. gross domestic product

The prices of capital goods are: a. not included in the gdp deflator but are included in the cpi b. included in neither the gdp deflator nor the cpi c. not included in the CPI but are included in the gdp deflator

c. not included in the CPI but are included in the gdp deflator

What does the annual percentage change in the GDP deflator tell us? a. the unemployment rate b. the change in real gdp c. the inflation rate

c. the inflation rate

The gdp deflator enables economists to make adjustments changes in: a. quality b. output c. population d. prices

d. prices

How do economists define investment? a. The purchase of newly created goods and services to add to the capital stock b. the purchase of shares in publicly traded corporation c. the purchase of interest bearing assets such as bonds

a. The purchase of newly created goods and services to add to the capital stock

the market basket used to measure price changes is: a. fixed in the CPI but changing in the GDP deflator b. fixed in the GDP deflator but changing in the CPI c. fixed in both gdp deflator and CPI

a. fixed in the CPI but changing in the GDP deflator

Ruritania has a labor force of 50 mil people. Currently 48.2 mil are employed. What is the Ruritanian unemployment rate? a. 96.4 % b. 3.6% c. 3.7% d. 1.8%

b. 3.6%

When comparing economic performance in different years, economists: a. adjust for changes in output b. adjust for changes in prices c. adjust changes in both output and prices

b. adjust for changes in prices

How do economists deine gross national product a. Total expenditure on an economy's output of final goods and services b. total expenditure on an economy's output of final goods and services plus net foreign earning c. gdp minus depreciation

b. total expenditure on an economy's output of final goods and services plus net foreign earning