Gross National Product equals:
a) Net National Product adjusted for inflation
b) Gross Domestic Product adjusted for inflation
c) Gross Domestic Product plus net property income from abroad
d) Net National Product plus net property income from abroad
Answer: c) Gross Domestic Product plus net property income from abroad
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Which of the following statements is TRUE about the difference between the public debt and the government budget deficit?
A) The public debt is a flow measure and the government budget deficit is not a flow measure. B) There is no relationship between the public debt and the government budget deficit since one is a stock measure and the other is a flow measure. C) The public debt always increases while the government budget deficit may increase or decrease. D) The public debt for this year will increase or decrease depending upon whether there is a government budget deficit or a government budget surplus.
The period of time in which the level of output moves from a trough to a peak is called a
A) contraction or recession. B) recovery or expansion. C) plateau. D) depression.
Consumption spending will ________ when disposable income ________
A) increase; decreases B) decrease; increases C) change unpredictably; decreases D) increase; increases
Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary