Chapter 2 : National Income and Output Quiz

Which of the following is NOT a method of measuring national income?

• Product Approach

• Market Approach

• Income Approach

• Expenditure Approach

What does Gross Domestic Product (GDP) measure?

• Total exports minus imports

• Total government spending

• Total income earned by residents of a country

• Total market value of all final goods and services produced within a country

In the circular flow of income model, what do households provide to firms?

• Financial investments

• Government services

• Goods and services

• Factors of production

What is the formula for calculating GDP market price?

• C+I+G+(X-M)

• C+I-G-(X-M)

• C-I-G-X-M

• C+I- Depreciation

Which of the following is included in the Expenditure Approach to calculating GDP?

• Wages and salaries

• Net factor income abroad

• Personal consumption

• Corporate taxes

Which of the following is a component of the Income Approach to measuring GDP?

• Personal consumption

• Government spending

• Wages and salaries

• Net exports

What is the purpose of using national income statistics in economic policy?

• To measure inflation

• To formulate future economic policies

• To calculate population growth

• To assess environmental impact

What is the formula for calculating Gross National Product (GNP)?

• GNP = GDP - Transfer Payments

• GNP = GDP + Depreciation

• GNP = GDP - Indirect Taxes

• GNP = GDP + Net Factor Income from Abroad

Which of the following is a challenge in measuring national income?

• Stable economic conditions

• High levels of government spending

• Accurate data collection

• Increased foreign investment

What does the term 'factor cost' refer to?

• Total income earned by households

• Price of output based on the cost of production factors

• Government expenditure on services

• Price of output based on market demand