Economic Growth

Which of the following is an injection into the circular flow of income?

• Taxation

• Savings

• Exports

• Imports

An increase in which of the following would cause a decrease in aggregate demand?

• Exports

• Imports

• Government Spending

• Investment

What is the economic growth rate in year 2?

• 5%

• 10%

• 11%

• 20%

Which of the following best defines an economy at equilibrium?

• Leakages are equal to injections

• Aggregate demand is equal to aggregate supply

• National income and national output would be equal

• All of the above

An individual receives an additional $100 in income and saves $20. Which of the following is true?

• The average propensity to consume is 0.8

• The average propensity to consume is 0.2

• The marginal propensity to consume is 0.2

• The marginal propensity to consume is 0.8

A firm purchases a new photocopier for its printing room. Which of the following components of aggregate demand would increase?

• Imports

• Exports

• Investments

• Consumption

Which of the following distinguishes nominal GDP from real GDP?

• Nominal GDP represents output whereas real GDP represents income

• Nominal GDP is the GDP level at current prices whereas real GDP is adjusted to remove the effects of inflation

• Real GDP is the GDP level at current prices where nominal GDP is adjusted to remove the effects of inflation

• Real GDP represents output where nominal GDP represents income

Which of the following best explains the term Marginal Propensity to Consume?

• The proportion of total income remaining after consumption

• The proportion of an extra dollar remaining after taxation

• The proportion of total income remaining after taxation

• The proportion of an extra dollar of income spent on consumption

One supply-side mechanism that the government can use to stimulate economic growth is:

• Increasing tariffs

• Decreasing tariffs

• Increasing aggregate demand

• Decreasing aggregate deman

How is economic growth measured?

• CPI

• GDP

• CDI

• ABC