The income approach to measuring GDP
A. adds the income received by all factors of production.
B. excludes profits since profits are a cost of production.
C. adds the dollar value of final goods and services.
D. excludes durable consumer goods since they last more than a year.
Answer: A
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If the real interest rate increases
A. there will be a movement upward along the investment demand curve. B. the investment demand curve will shift to the left. C. the investment demand curve will shift to the right. D. there will be a movement downward along the investment demand curve.
The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains have not kept pace with the 3 percent rate of inflation. The Secretary's statement is a (n) ____ economic statement, and the labor head's statement is a (n) ____ economic statement
a. normative; normative b. normative; positive c. positive; normative d. positive; positive e. proper; improper
A laissez faire policy is one in which
a. the government plays a major role in guiding economic activity b. the government prefers to control taxes rather than spending c. the government leaves things alone d. individuals rely on the government for guidance but not for active intervention in the economy e. businesses rely on the government for guidance but not for active intervention in the economy
If MPC = 0.80, MPS must be ______ and the income multiplier is ______
a. 1.20; 4 b. 0.20; 5 c. 1.80; 4 d. 0.25; 5 e. 0; 10