Test Bank For International Economics 3rd Edition By Robert C. Feenstra
CHAPTER 5
Tracking and measuring international flows of goods and assets are based on principles:
A)
economics.
B)
statistics.
C)
historical precedents.
D)
accounting.
Ans: D Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: Measuring Macroeconomic Activity: An Overview
2.
Summaries of international flows of goods and assets are recorded in a nation’s:
A)
national income and product accounts.
B)
balances with the IMF.
C)
balance of payments accounts.
D)
balance on international indebtedness.
Ans: C Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: Measuring Macroeconomic Activity: An Overview
3.
Gross national expenditure in a closed economy is defined as:
A)
government spending net of taxes.
B)
personal consumption spending, government spending, and investment spending.
C)
personal consumption spending, government spending, investment spending, and spending on exports.
D)
production of consumer goods, government services, and capital goods.
Ans: B Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
4.
In national accounts data, which is the largest share of GNEs?
A)
Consumption
B)
Investment
C)
government consumption
D)
All are roughly equal in size.
Ans: A Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Fact-Based Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
5.
In a closed economy, income generated from production is equal to:
A)
GNE.
B)
GDP.
C)
GNI.
D)
GNE, GDP, and GNI.
Ans: D Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
6.
In a closed economy in which no international economic activity occurs, which of the following is NOT true?
A)
Production in the nation must equal total demand (spending on final goods and services).
B)
Total spending is equal to the sum of consumer spending, business investment, and government purchases.
C)
Value added in the economy is equal to income paid to factors of production.
D)
Value added in the economy is equal to the sum of consumer spending, business investment, and government purchases.
Ans: D Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Concept-Based Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
7.
The circular flow concept of a closed economy helps to explain why:
A)
firms are able to earn profits.
B)
GDP, GNI, and GNE are equal.
C)
unemployment is not a problem in a closed economy—only in an open economy.
D)
nominal GDP is always higher than real GDP.
Ans: B Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Concept-Based Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
8.
The personal consumption expenditure includes all of the following, EXCEPT spending by private households on:
A)
final goods and services.
B)
nondurable goods.
C)
durable goods.
D)
capital stock.
Ans: D Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
9.
Government consumption expenditure includes the following, EXCEPT government spending on:
A)
national defense.
B)
public works.
C)
Social Security.
D)
civil services.
Ans: C Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: The Flow of Payments in a Closed Economy: Introducing the National Income and Product Accounts
10.
Income paid to factors is called:
A)
national income.
B)
value added.
C)
net exports.
D)
the current account.
Ans: A Difficulty: Easy Section: Measuring Macroeconomic Activity: An Overview Skill Descriptor: Definitional Topic: The Flow of Payments in a Closed Economy: Int
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