Question

The largest component of national income is:

Question 1 options:

a)	compensation of employees.

b)	corporate profits.

c)	rental income.

d)	proprietors' income.

Which component of GDP includes inventory changes?

Question 2 options:

a)	consumption

b)	investment

c)	Inventory changes are not included in GDP.

d)	government spending

A jobless recovery is an economic expansion accompanied by a decrease in the number of unemployed workers.

Question 3 options:

a)

False

b)

True

Which of the following is NOT an example of gross private domestic investment?

Question 4 options:

a)	a household's purchase of shares of Google stock

b)	the construction of new residential housing

c)	the construction of a new hotel

d)	a change in business inventories

Which of the following is true within the circular flow of economic activity?

Question 5 options:

a)	Business firms are buyers of products and sellers of production factors.

b)	Households are buyers of products and sellers of production factors.

c)	Households are sellers of products and buyers of production factors.

d)	Business firms are buyers and sellers of production factors.

The study of macroeconomics as a specific discipline can be attributed to:

Question 6 options:

a)	John Maynard Keynes.

b)	Milton Friedman.

c)	Adam Smith.

d)	Joseph Schumpeter.

A major appliance is an example of a nondurable good.

Question 7 options:

a)

True

b)

False

Within the circular flow diagram, the arrows pointing counterclockwise represent flows of money.

Question 8 options:

a)

True

b)

False

Suppose an economy has historically grown at a rate of 1.25%. Economic activity decreased every quarter over the past year, but the decline stopped this quarter. The economy is expected to grow at a rate of 1.4% in the near future, but monetary authorities are concerned that inflation may increase. This economy is probably in the _____ stage of the business cycle.

Question 9 options:

a)	contraction

b)

recovery

c)

trough

d)

expansion

In the circular flow diagram, the clockwise direction shows the flow of _____, where households supply _____ and businesses supply _____.

Question 10 options:

a)	goods and services; labor; goods and services

b)	goods and services; purchases of goods and services; income to households

c)	money; labor; goods and services

d)	money; purchases of goods and services; income to households

Answer 1

Ques2: The correct option is B as change in inventory is added in investment under inventory investment.

Ques3: False, Jobless recovery an economic expansion increase the no. of unemployed workers.

Ques4 The correct option ia A. This is because purchase of stock is not included in Investment as there are financial claim, there is no production happen in case of purchase of share.

Ques5: In a circular flow, Households are buyer of goods and services and seller of factor of production.Hence option B is correct.

Ques8: True, the arrow pointing anticlockwise represents flow of money from producer sector to household sector in the form of factor payment for using Factornof Production.