Exhibit 5-5 Gross domestic product data
National income accountBillions ofdollars
Depreciation$ 500
Net interest 2,000
Compensation of employees 6,000
Profits 1,500
Rental income 200
Indirect business taxes 800
Net exports 1,000
As shown in Exhibit 5-5, using the income approach, gross domestic product (GDP) is:
A. $8,000 billion.
B. $8,800 billion.
C. $9,400 billion.
D. $11,000 billion.
Answer: D
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Refer to Figure 2-2. Suppose Mendonca is currently producing 60 pounds of vegetables per period. How much meat is it also producing, assuming that resources are fully utilized?
A) 45 pounds of meat B) 75 pounds of meat C) 80 pounds of meat D) 100 pounds of meat
If an increase in investment of $100 billion generates an increase of $500 billion in real GDP, the multiplier is
A. 20 B. 50 C. 1.50. D. 5.00.
Autarky is a situation in which a country is economically
A. destroyed. B. underdeveloped. C. self-sufficient. D. dependent on trade.
The economic theory that emphasizes the role of difficulties in coordinating economic affairs as a cause of economic fluctuations is known as:
A. Keynesian economics. B. investment cycle theory. C. real business cycle theory. D. technology shock theory.