Which of the following is true?
(a) GDE = FD - M;
(b) GDPfc +T-S=GDPmp;
(c) GNP - NFIFA = NNP;
(d) GNP=FD-X.
Answer: (c) GNP - NFIFA = NNP;
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How does Gordon integrate the exogenous factors affecting economic growth into the production function for an economy?
A) Y = A(G,R,H) F(K,P,T,N) B) Y = A(G,P,T) F(K,R,H,N) C) Y = A(G,P,T,R) F(K,H,N) D) Y = A(P,T,K) F(G,R,H,N)
Answer the following statements true (T) or false (F)
1. There is a correlation between the level of economic development of a nation and the status of its balance of trade. 2. The balance of payments is more like an income statement than a balance sheet. 3. If a U.S. farmer ships grain to Italy, this constitutes a debit transaction in Italy’s balance of payments. 4. Overseas investments by U.S. citizens are recorded as credit items in the financial account of the U.S. balance of payments. 5. Since unilateral transfers do not involve trading of goods or services, they are not included in the current account.
One complication that tends to prolong recessionary gaps is that wages
a. are fixed by unions, which represent nearly all workers in the United States. b. tend to rise rapidly. c. rarely fall. d. tend to move in the opposite direction from prices.
Suppose that the Fed decides to increase the growth rate of the money supply in the United States. What is most likely to happen to the U.S. trade deficit and to GDP?
A. The trade deficit will fall; GDP will fall. B. The trade deficit will rise; GDP will rise. C. The trade deficit will fall; GDP will rise. D. The trade deficit will rise; GDP will fall.