TCQT Quiz

Government transfer payments like social security and unemployment benefits are

• included in government purchases.

• not included in government purchases.

• Optionnot included in government purchases, but they are included in the consumption component of GNP

In open economies,

• saving and investment are necessarily equal.

• as in a closed economy, saving and investment are not necessarily equal.

• saving and investment are not necessarily equal as they are in a closed economy.

The highest component of GNP is,

• the current account.

• investment

• government purchases.

• consumption

For open economies

• S = I - CA

• S > I + CA

• S = I + CA

GDP is supposed to measure

• the volume of production of a country's output.

• the volume of production within a country's borders.

• GNP plus depreciation

The sale of

• a used textbook does enter GNP.

• both a used textbook and a used house do not enter GNP.

• a used house does not enter GNP, but the sale of a used book does.

Which one of the following expressions is the most accurate

• CA = EX - IM

• CA = EX = IM

• CA = EX + IM

GDP is different than GNP in that

• it accounts for net unilateral transfers.

• it does not account for a country's production using services with foreign-owned capital.

• it accounts for depreciation

Which of the following is false about private savings and government savings

• Unlike private saving decisions, government saving decisions are often made with an eye toward their effect on output and employment

• Total savings (S) = SP + Sg.

• The national income identity can help us to analyze the channels through which government saving decisions influence macroeconomic conditions.

• None of the above; all statements are true.

Disposable income is National income

• less net taxes collected from households and firms by the government.

• less net taxes collected from households by the government

• plus net taxes collected from households and firms by the government