Economics Quiz

Government borrowing is:

• the amount of funds raised by government in the financial markets.

• the amount of government spending on goods and services.

• the amount of government tax revenues collected.

• the amount of government spending on transfer payments.

• the amount of new money the government prints to pay the nation's bills.

Which one of the following is an example of consumption spending that would be counted toward GDP this year?

• Samantha bought an oven for her cooking show on Food Network.

• Stephanie bought a laptop for her brother.

• Jim purchased 200 shares of Google stock.

• Mr. Smith spent $1500 to buy a used car for his son.

• Eli invested $2000 in a mutual fund through his employer.

Enchante Inc., a designer clothing company buys $400 worth of silk from a silk trader, and $30 worth of accessories from AccessoriesRUs to produce each dress. The dress sells for $630. What is the value added by Enchante?

• $630.

• $230.

• $200.

• $830.

• $600.

The Boeing Corporation buys $3 million worth of steel from steel manufacturers, $2.5 million worth of computerized hardware and software, and $1 million worth of mechanical tools to manufacture a certain model of aircraft. Boeing Corporation sells this particular model of aircraft at $10 million. The value-added by Boeing is equal to:

• $3.5 million.

• $16.5 million.

• $3 million.

• $15.5 million.

• $10 million.

Which of the following best represents the expenditure approach for computing GDP?

• GDP = C + I + G – T – X – M

• GDP = C + I + G + X – M

• GDP = C + I + G + Taxes – Value Added

• GDP = C + I + G + Taxes + X + M

• GDP = C + I + G + Taxes – Transfers + X - M

A nation's exports minus its imports:

• equals its private investment.

• is net exports.

• is always equal to a positive number.

• is equal to net transfer payments.

• can be equal to a positive number or zero, but never a negative number.

Which of the following would be classified as consumption?

• a new computer purchased by Federal Express for one of its corporate executives.

• a storage facility built for a moving company.

• a new car purchased by an employee of a company for personal use.

• a dump truck purchased by a demolition company.

• a new photocopier purchased for a small consulting firm.

Which of the following would be an example of an intermediate good?

• stocks and bonds purchased by a business executive

• a cellular telephone purchased by a college student

• a wedding ring purchased by an engineer for his fiancée

• Goodyear tires purchased by General Motors for newly produced electric cars

• a subscription for satellite television services from DirecTV.

During 2009, the country of Silvadia recorded a GDP of $65 billion, interest payments of $15 billion, imports of $13 billion, profits of $7 billion, exports of $15 billion, and rent of $7 billion, wages during 2009 in Silvadia were:

• $36 billion.

• $38 billion.

• $51 billion.

• $64 billion.

• $34 billion.

Households receive income in the form of all the following EXCEPT:

• wages.

• profits.

• interest.

• investment spending.

• rent.