Questions and Answers
Disposable income equals national income minus personal taxes.
True
Corporate profits is the largest category of national income.
False
Which of the following illustrates double counting?
In the United States, which is the largest dollar figure?
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"Economic growth" has occurred if:
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Study Notes
Disposable Income
- Disposable income is defined as national income minus personal taxes.
- True statement regarding disposable income.
Corporate Profits
- Corporate profits are not the largest category of national income.
- False statement about corporate profits.
Double Counting
- Double counting occurs when the total market values of intermediate goods and final goods are summed.
- Example of double counting: adding the market value of steel used in a car to the market value of the car itself.
Largest Dollar Figure in the U.S.
- The largest dollar figure in the United States is gross domestic product (GDP).
- Other options include disposable personal income, per-capita GDP, and personal income, which are smaller in comparison to GDP.
Economic Growth Indicator
- Economic growth is indicated by real GDP being greater than real GDP from the previous year.
- This suggests an increase in the overall economic activity relative to the past year.
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Description
Test your knowledge on key concepts from Economics Chapter 7 with these flashcards. This quiz covers topics like disposable income, corporate profits, and issues like double counting in national income. Engage with the material to enhance your understanding of economic principles.
