Understanding Factors of Production and Financial Flows Quiz

<p>To identify asset classes and securities that will benefit from economic trends</p> Signup and view all the answers

<p>Aggregate output and aggregate income are always equal in an economy.</p> Signup and view all the answers

<p>Rent</p> Signup and view all the answers

<p>Net exports</p> Signup and view all the answers

<p>GDP is the market value of all final goods and services produced within the economy during a given period.</p> Signup and view all the answers

<p>The value of owner-occupied rent is estimated and added to GDP</p> Signup and view all the answers

<p>To account for the value of housing services in GDP</p> Signup and view all the answers

<p>Activities performed for one's own benefit</p> Signup and view all the answers

<p>To account for changes in the general price level</p> Signup and view all the answers

<p>GDP is measured consistently over time and across countries</p> Signup and view all the answers

<p>Goods whose value can be determined by being sold in the market</p> Signup and view all the answers

<p>Intermediate goods are excluded from the calculation of GDP</p> Signup and view all the answers

<p>Summing the market value of all the final goods and services produced</p> Signup and view all the answers

<p>Consumption</p> Signup and view all the answers

<p>To finance investment in capital goods</p> Signup and view all the answers

<p>Investment</p> Signup and view all the answers

<p>The domestic economy is spending more on international goods and services than other nations' economies are spending on domestic goods and services</p> Signup and view all the answers

<p>Nominal GDPt = Pt × Qt</p> Signup and view all the answers

<p>GDP deflator = Value of current year output at current year prices / Value of current year output at base year prices × 100</p> Signup and view all the answers

<p>Real GDP = Nominal GDP/(GDP deflator/100)</p> Signup and view all the answers

<p>3% real growth</p> Signup and view all the answers

<p>Trade deficits and trade surpluses must balance each other out.</p> Signup and view all the answers

<p>Expenditure = C + I + G + (X - M)</p> Signup and view all the answers

<p>Y + F - SB - R = C + SH</p> Signup and view all the answers

<p>Net taxes</p> Signup and view all the answers

<p>Trade deficits must be financed by borrowing from the rest of the world.</p> Signup and view all the answers

<p>Trade deficits and trade surpluses must balance each other out.</p> Signup and view all the answers

<p>Individual income</p> Signup and view all the answers

<p>What factors determine the level of aggregate output/income for an economy?</p> Signup and view all the answers

<p>Consumer price index (CPI)</p> Signup and view all the answers

<p>Individual savings</p> Signup and view all the answers

<p>Intermediate goods used to produce another good</p> Signup and view all the answers

<p>To account for changes in the overall price level</p> Signup and view all the answers

<p>Y = C + I + G + X - M</p> Signup and view all the answers

<p>Trade deficits require financing from foreign sources</p> Signup and view all the answers

<p>Government spending</p> Signup and view all the answers

<p>Dividends</p> Signup and view all the answers

<p>They are all equal</p> Signup and view all the answers

<p>GDP = W + R + I + P</p> Signup and view all the answers

<p>Factors of production flow from households to business firms</p> Signup and view all the answers

<p>Income flows from business firms to households</p> Signup and view all the answers

<p>Government expenditure flows from the government sector to business firms</p> Signup and view all the answers

<p>Net exports flow from the rest of the world to the domestic economy</p> Signup and view all the answers

<p>$Real GDP_{2020} = (€18,750 × 300,000)$</p> Signup and view all the answers

<p>$GDP deflator = (Nominal GDP/Real GDP) × 100$</p> Signup and view all the answers

<p>Real GDP = Nominal GDP/(GDP deflator/100)</p> Signup and view all the answers

<p>0.102</p> Signup and view all the answers

<p>Trade deficits can only exist if there are corresponding trade surpluses.</p> Signup and view all the answers

<p>The relationship between total private sector saving and net taxes.</p> Signup and view all the answers

<p>To account for the value of housing services provided by homeowners to themselves.</p> Signup and view all the answers

<p>Real GDP measures the value of goods and services produced in constant prices, while nominal GDP measures the value of goods and services produced in current prices.</p> Signup and view all the answers

<p>Expenditure = C + I + G + (X - M)</p> Signup and view all the answers

<p>To examine the aggregate behavior of the economy as a whole.</p> Signup and view all the answers

<p>Underground economy activities</p> Signup and view all the answers

<p>To account for non-market activity</p> Signup and view all the answers

<p>Real GDP adjusts for changes in the general price level</p> Signup and view all the answers

<p>Government expenditure flows from government to households</p> Signup and view all the answers

<p>Real GDP is not affected by changes in the price level.</p> Signup and view all the answers

<p>Nominal GDP = Real GDP * Price Level</p> Signup and view all the answers

<p>Real GDP accounts for changes in the general price level, providing a more accurate measure of economic activity over time.</p> Signup and view all the answers

<p>The relationship between nominal GDP and real GDP depends on the inflation rate.</p> Signup and view all the answers