1. which one of the following statements about national income is correct?
a. national income is the before-tax income received by households.
b. national income is the income earned by us resource suppliers plus taxes on production and imports.
c. national income is the income received by households less personal taxes.
d. national income is the market value of the annual output net of consumption of fixed capital.
2. most economists agree that the immediate cause of most business cycle variation is
a. an unexpected change in the level of total spending.
b. the invention of new products.
c. an unexpected change in the productivity of workers.
d. the growth and subsequent bursting of financial bubbles.
3. the industries or sectors of the economy in which business cycle fluctuations tend to affect output the most are
a. clothing and education.
b. military goods and capital goods.
c. services and nondurable consumer goods.
d. capital goods and durable consumer goods.
4. all of the following factors are components of real gdp, except
a. government expenditures.
b. net exports.
c. secondhand sales.
d. consumption of final goods.
5. countries that have experienced modern economic growth have also tended to
a. move toward more democratic forms of government.
b. have less leisure time for sport and artistic activities.
c. adopt feudalistic institutions.
d. restrict women and minorities from holding certain economic and political positions.
6. national income accountants can avoid multiple counting by
a. including only income deposits in their calculations.
b. counting intermediate goods only.
c. including transfer payments in their calculations.
d. counting final goods only.
7. suppose that an economy has 10 million people working full time and another 2 million people actively seeking work. an additional 1 million people had been unemployed, but they have become discouraged by the poor state of the economy and have given up looking for work. what's the size of the economy's labor force?
a. 13 million people
b. 7 million people
c. 8 million people
d. 12 million people
8. what role do banks play in saving and investment?
a. banks keep household savings from being spent at businesses.
b. banks create economic expectations that impact private investment.
c. banks use household savings to make mortgage loans, which people purchase homes.
d. banks channel household savings toward business investments.
9. growth is advantageous to a nation because it
a. eliminates the economizing problem.
b. lessens the burden of scarcity.
c. promotes faster population growth.
d. slows the growth of wants.
10. the two topics of primary concern in macroeconomics are
a. unemployment and wage rates in labor markets.
b. short-run fluctuations in output and employment and long-run economic growth.
c. oil prices and housing markets.
d. monopoly power of corporations and small business profitability.