Level of Economic Activity

In the simple circular flow model of a closed economy with no government or financial markets

• consumer income = value of output

• value of output = consumer expenditure

• consumer income = consumer expenditure

• all of the above

Rent is the payment for

• land

• labour

• capital

• entrepreneurship

Wages are the payment for

• land

• labour

• capital

• entrepreneurship

Interest is the payment for

• land

• labour

• capital

• entrepreneurship

Profit is the payment for

• land

• labour

• capital

• entrepreneurship

Which of the following statements is true?

• Leakages include saving, import spending and government spending.

• Injections include investment spending, government spending and import spending.

•       If leakages are greater than injections, the size of the circular flow increases

• If injections are greater than leakages, the size of the circular flow increases.

GNI is

• a measure of income earned by domestic residents

• GDP in constant prices

• GDP in current prices

• a measure of value of output produced domestically

Nominal GDP is

• value of GDP divided by the population

• measure of income earned by domestic residents

• value of GDP in current prices

• value of GDP in constant prices

Per capita real GDP is

• a measure of income earned by domestic residents

• a measure of value of output produced domestically

• a value of GDP in current prices

• real GDP divided by population

Real GDP is

• nominal GDP divided by the population

• the value of GDP in constant prices

• the measure of income earned by domestic residents

• the measure of value of output produced domestically