chapter 4 macro questionssss

Income Approach to GDP

wages for labor, interest for capital, rent for land, and profit for entrepreneurship

The amount by which​ _____ is called net investment. A. the value of capital increases​firms' profits increase C. ​firms' costs decrease D. the value of capital decreases

A. the value of capital increases​firms' profits increase

Which of the following is an example of investment​? A. Mike buying an Apple iPad Your answer is not correct. B. Ron buying stocks and bonds. C. Randy buying a BMW D. Continental buying Airbus planes

D

Expenditure Approach Formula

Y=C+I+G+NX

What adjustments must be made to total income to make it equal​ GDP? GDP is calculated by​ _________. A. adding indirect taxes less subsidies to total income and subtracting depreciation B. adding indirect taxes less subsidies and depreciation to total income Your answer is correct. C. subtracting indirect taxes less subsidies from total income and adding depreciation D. subtracting indirect taxes less subsidies and depreciation from total income

adding indirect taxes less subsidies and depreciation to total income

The income approach to measuring GDP sums together​ ______, which equals net domestic income at factor cost. A. compensation of​ employees, net​ interest, rental​ income, and​ proprietors' income B. compensation of​ employees, net​ interest, rental​ income, corporate​ profits, and​ proprietors' income This is the correct answer. C. compensation of​ employees, direct​ taxes, and consumption of fixed capital Your answer is not correct. D. consumption​ expenditure, investment, government expenditure on goods and​ services, and net exports

compensation of​ employees, net​ interest, rental​ income, corporate​ profits, and​ proprietors' income

payments made from households to firms are

consumption expenditures

The phases of the business cycle are​ _______. The turning points of the business cycle are​ _______.

expansion and​ recession; peak and trough

GDP equals aggregate income and also equals aggregate expenditure because​ _______.

firms pay out as incomes​ (aggregate income) everything they receive from the sale of their output​ (aggregate expenditur

payments from govt to firms

govt expenditure

Payment flows from firms through factor markets to households are

income

Net domestic income at factor cost is the

income paid to factors of​ production: wages,​ rent, interest, and profit.

payments from firms to firms

investment

Net exports of goods and services

is the value of exports of goods and services minus the value of imports of goods and services.

payments from the rest of the world to US firms are

net exports

PPP is​ _______.

purchasing power parity

To measure the standard of​ living, we use​ _____

real GDP per person