Question

 

10. Which of the following is the name of the method that measures Gross Domestic Product (GDP) in relationship to the size of the population ____?

A. Gross National Product (GNP)

B. worker GDP

C. GDP per person

D. capital GDP

11. Which of the following statements is true regarding the natural unemployment rate?

A. It is always at zero percent.

B. It reflects unemployment when an economy is in “full employment”.

C. It is decided upon by the federal government.

D. It is the amount of unemployment in the economy, adjusted for the effects of inflation.

12. In a closed economy, income equals expenditure because of which of the following ____?

A. The influence of governments on individual markets.

B. GDP does include all expenditures.

C. GDP does not include all intermediate goods.

D. The expenditure of the buyer must be equal to the income of the seller.

13. If a country has $50 million of net exports and $70 million of saving, net capital outflow and domestic investment must be which of the following ____?

A. Net capital outflow is $50 million, and domestic investment is $70 million.

B. Net capital outflow is $120 million, and domestic investment is $70 million.

C. Net capital outflow is $50 million, and domestic investment is $20 million.

D. Net capital outflow is $120 million, and domestic investment is $50 million.

14. The ability of banks to create money has its source in which of the following _____?

A. the 100 percent reserve requirement

B. the ability of the government to mint as much currency as it wishes

C. the banks’ ability to issue currency (bank notes) of their own

D. fractional-reserve banking (i.e. less than 100 percent reserve requirement)

Answer 1

10) C GDP per person or GDP per capita=GDP/Total population

11) B natural rate of unemployment is the rate of unemployment when economy is at full employment level

12) D The income=Expenditure because income of seller comes from buyer expenditure

13) A At equilibrium saving=investment and capital flow=Net export

14) D Under fractional reserve system there is money multiplier