IM2_National Income and Economic Concepts

What is the definition of National Income?

• Total value of all products produced in a country

• Total exports of a country

• Total savings of a country

• Total income received by the government

What does GDP stand for?

• Gross Domestic Product

• Gross Development Product

• General Development Product

• General Domestic Product

Which of the following is NOT a component of aggregate expenditure?

• Consumption

• Investment

• Import

• Government Spending

What does PNB stand for?

• Product National Base

• Gross National Balance

• Product National Balance

• Gross National Product

What is the difference between nominal and real national income?

• Nominal reflects quantity, real reflects price

• Nominal reflects price, real reflects quantity

• Both reflect quantity

• Both reflect price

Which method calculates national income by summing up all expenditures?

• Net Product Method

• Production Method

• Expenditure Method

• Income Method

What is included in the consumption component of national income?

• Household spending

• Exports

• Government spending

• Business investments

What is the formula for calculating national income using the expenditure approach?

• Y = C + I + G

• Y = C + G + I

• Y = C + (X-M)

• Y = C + I + G + (X-M)

What does the term 'disposable income' refer to?

• Income from government subsidies

• Income from investments

• Total income before taxes

• Income after taxes

Which of the following is a purpose of national income data?

• To calculate inflation

• To set interest rates

• To assess economic performance

• To determine tax rates