Economics Quiz

Capital goods are:

• Goods purchased by households

• Goods used to produce other goods and services

• Goods that are consumed immediately

• Goods used for personal consumption

Flow variables:

• Are measured at a specific point in time

• Are measured over a period of time

• Include wealth and capital

• Do not change over time

Fixed investment refers to:

• Investment in stocks and bonds

• Investment in inventory

• Investment in physical assets like machinery and buildings

• Investment in human capital

Real flows refer to:

• The flow of money between sectors

• The flow of goods and services between sectors

• The flow of investments

• The flow of financial assets

An open economy:

• Does not trade with other countries

• Trades with other countries

• Has no government intervention

• Is self-sufficient

Depreciation is subtracted from gross investment to calculate:

• Net exports

• Net investment

• Gross Domestic Product (GDP)

• Gross National Product (GNP)

Intermediate goods are:

• Used directly by consumers

• Used in the production of final goods

• Not counted in GDP calculations

• Both B and C

Which sector of the economy provides public goods and services?

• Household sector

• Business sector

• Government sector

• Foreign sector

Net investment is calculated by:

• Subtracting gross investment from depreciation

• Adding depreciation to gross investment

• Subtracting depreciation from gross investment

• Subtracting gross investment from total investment

Money flows in an economy:

• Represent the movement of goods and services

• Represent the exchange of money for goods and services

• Do not include payments for labor

• Are not part of the circular flow model