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Questions and Answers
Which method is used to calculate national income by summing the total value added at each stage of production?
Which method is used to calculate national income by summing the total value added at each stage of production?
- Expenditure method
- Income method
- GDP deflator method
- Product method (correct)
Which economist named his most influential work 'An Enquiry into the Nature and Cause of the Wealth of Nations'?
Which economist named his most influential work 'An Enquiry into the Nature and Cause of the Wealth of Nations'?
- Milton Friedman
- Karl Marx
- John Maynard Keynes
- Adam Smith (correct)
Which price index is used to measure the average level of prices of all new domestically produced final goods and services in an economy?
Which price index is used to measure the average level of prices of all new domestically produced final goods and services in an economy?
- Wholesale Price Indices
- Producer Price Index
- GDP deflator (correct)
- Consumer Price Index
In the circular flow of income, which sector represents the households and firms purchasing goods and services?
In the circular flow of income, which sector represents the households and firms purchasing goods and services?
Flashcards
National Income Calculation Method
National Income Calculation Method
Calculating national income by summing up the total value added at each step of production.
Wealth of Nations Author
Wealth of Nations Author
Adam Smith wrote "An Inquiry into the Nature and Causes of the Wealth of Nations."
GDP Deflator
GDP Deflator
Measures the average price of domestically produced new final goods and services.
Circular Flow: Household/Firm Sector
Circular Flow: Household/Firm Sector
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Study Notes
Calculating National Income
- The value-added method is used to calculate national income by summing the total value added at each stage of production.
Influential Economist and Work
- Adam Smith is the economist who named his most influential work 'An Enquiry into the Nature and Cause of the Wealth of Nations'.
Price Index
- The GDP Deflator is the price index used to measure the average level of prices of all new domestically produced final goods and services in an economy.
Circular Flow of Income
- The household sector represents households and firms purchasing goods and services in the circular flow of income.
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