National Income and Economic Concepts Quiz

What is the primary factor that determines a country's economic wealth according to the introduction?

• The amount of natural resources it possesses

• The way resources are utilized in production

• The level of technological advancement

• The size of its population

How does the flow of production arise in a modern economy?

• By combining energies with the environment

• Through the import of goods

• By increasing the population

• Through government intervention

What defines a 'final good' in economic terms?

• A good that is consumed immediately

• A good that is used in further production

• A good that does not undergo further transformation

• A good that is exported

Which of the following is NOT a characteristic of capital goods?

• They are durable

• They are consumed immediately

• They are used in the production process

• They undergo wear and tear

What is the main difference between consumption goods and capital goods?

• Capital goods are used in production, consumption goods are for final use

• Consumption goods are durable, capital goods are not

• Capital goods are consumed immediately

• Consumption goods are more expensive

Why is it important to avoid double counting in economic measurements?

• It increases the accuracy of GDP

• It simplifies economic calculations

• It exaggerates the final value of economic activity

• It leads to underestimation of economic activity

What role do intermediate goods play in the production process?

• They are exported to other countries

• They are the final products sold to consumers

• They are stored for future use

• They are used as inputs for producing other goods

What is the difference between stock and flow variables?

• Both are measured at a point in time

• Both are measured over time

• Flow variables are measured over time, stock variables at a point in time

• Stock variables are measured over time, flow variables at a point in time

How is depreciation typically calculated for a capital good?

• By its replacement cost

• By dividing its cost by its useful life

• By its production cost

• By its market value

What is the purpose of gross investment in an economy?

• To increase consumer spending

• To increase exports

• To maintain and grow the capital stock

• To reduce government debt