Tackle the Test: Multiple-Choice Questions

1. Question

   The circular-flow diagram is a simple model of the macroeconomy in which

   A.

   the flow of money into each market or sector exceeds the flow of money coming out of that market or sector.

   B.

   the value of stocks equals the value of bonds.

   C.

   households own the factors of production.

   D.

   there is only one household and one firm.

   E.

   goods and services are sold in factor markets.

   The circula

2. Question

   GDP is equal to

   A.

   the total value of all goods and services produced in an economy during a given period.

   B.

   C + I + G + IM.

   C.

   the total value of intermediate goods plus final goods.

   D.

   the total income received by producers of final goods and services.

   E.

   none of the above.

   GDP is equal to

3. Question

   Which of the following is included in GDP?

   A.

   changes to inventories

   B.

   intermediate goods

   C.

   used goods

   D.

   financial assets (stocks and bonds)

   E.

   foreign-produced goods

   Which of the following is included in GDP?

4. Question

   Which of the following is not included in GDP?

   A.

   capital goods such as machinery

   B.

   imports

   C.

   the value of domestically produced services

   D.

   government purchases of goods and services

   E.

   the construction of structures

   Which of the following is

5. Question

   Which of the following components makes up the largest percentage of GDP measured by aggregate spending?

   A.

   consumer spending

   B.

   investment spending

   C.

   government purchases of goods and services

   D.

   exports

   E.

   imports

   Which of the following components makes up the largest percentage of GDP measured by aggregate spending?