Which of the following statements is false? O a) Purchases of capital goods are called investment Ob) GDP equals the total value of wages received by households. O c) In a simple economy with just households and firms, the value of investment equals the value of saving. O d) In a simple economy with just households and firms, the value of investment plus consumers' expenditure equals GDP.

billions of dollars Personal consumption expenditures 500 Gross private domestic investment 400 Social Security payments to households 60 Federal government purchases of goods and services 100 State and local government purchases of goods 200 Imports 180 Net exports |-50

Which of the following best describes aggregate expenditure? O a. C+I+G+ (X+ M) b. C+I+T+(X+M) Oc. C+S+G+ (X- M) Od. C+I+G+(X- M) O e. C+I+T+(X– M)

If in some year nominal GDP was $40 billion and the GDP deflator was 70, what was real GDP? O $30.0 billion O $110.0 billion O $57.1 billion O $175,0 billion

In the first half of 2017, automobile sales in the United States were lower than they were in the first half of 2016. The decrease in auto sales impacts GDP because new automobiles are counted as when purchased by households and when purchased by businesses. O investment; consumption O nondurable goods; durable goods O durable goods: nondurable goods O consumption; investment

Ceteris paribus, which of the scenarios below will unambiguously lead to an increase in real GDP? O a. The production of final goods and services decreases, but prices increase. O b. The prices of final goods and services decrease. O c. The prices of final goods and services increase. O d. The production of final goods and services increases. ge

Classify each of the following items as a final good or an intermediate good, and identify whether it is a component of consumption expenditure, investment, or government expenditure on goods and services: Item 1. Packing boxes bought by Amazon.com. Item 2. Starbuck's grande mocha frappuccino bought by a student. Item 3. A new limousine for the president. Item 4. New airplanes bought by United Airlines. Item 1 is and item 2 is O A. an intermediate good; a final good that is consumption expenditure B. a final good that is consumption expenditure; a final good that is consumption expenditure C. a final good that is consumption expenditure; a final good that is investment D. an intermediate good; a final good that is investment Item 3 is and item 4 is O A. an intermediate good; an intermediate good O B. a final good that is government expenditure; a final good that is investment O C. an intermediate good; a final good that is investment D. a final good that is government expenditure; an…

Based on the information presented below, what is the equation representing the saving for this economy? GDP (Y) $0 100 200 300 Cunsumption (C) $60 120 180 240 Oa. S = -60 + 0.6Y O b. S = 60+ 0.4Y O c. S = -40 +0.75Y O d. S= -60+ 0.4Y Saving (S) S-60 -20 20 60 Investment (1) $100 100 100 100

Item Consumption expenditure. Investment Government expenditure on goods and services Exports of goods and services Imports of goods and services 8. Based on the data in the table, what does GDP equal? O $11,183 billion O $11.023 billion O $11.103 billion O $12.393 billion Billions of Dollars 8180 1520 1403 1290 1370

Which one of the following statements about consumption spending is incorrect? A. Spending on non-durable goods such as food is the most stable component of consumption spending. B. Spending on durable goods is the most erratic or volatile component of consumption spending. O C. Consumption spending is determined largely by total income in the economy. O D. Part of consumption spending consists of spending on services. E. There is a strong inverse relationship between consumption spending and total income in the economy