Answer the following statements true (T) or false (F)

1) Within the circular flow model, the level of total resource income and total spending on output
will be approximately equal.
2) In determining GDP by the expenditures method, it is appropriate to use net investment rather
than gross investment as a measure of investment spending.
3) Gross private domestic investment exceeds depreciation in an economy that experiences
expanding production capacity.
4) Interest on the public debt is included as a part of government purchases in determining GDP
by the expenditures method.
5) All expenditures on new construction are included as investment in calculating GDP.


1) T
2) F
3) T
4) F
5) T

Economics

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