Question

1. TRUE/FALSE( 1 mark per question, 20 marksi 11] An economy's income is the same as its total) expenditure because every has a buyer and a seller every transaction ket value of all final goods and services produced by a country's citizens in a given period of time p) If'nominal GDP is $10,000 and real GDP is $8,000 then the GDP deflator is 125. thines equal, in countries with higher levels of real GDP per person, life expectancy and literacy rates are higher than in countries with lower levels of real GDP per person. IS) When the consumer price index falls, the typical family has to spend fewer dollars to maintain the same standard of living Economists use the term inflation to describe a situation in which the economy's overall price level is rising. When a new good is introduced, consumers have more variety from which to choose, and this in turn increases the cost of maintaining the same level of economic well-being. 固The real interest rate is the interest rate corrected for inflation. (91 Like physical capital, human capital is a produced factor of production. (101 When economists refer to investment, they mean the purchasing of stocks and bonds and other types of saving. rate and increases the equilibrium level of saving. rates rise, and investment falls. [11] An increase in the demand for loanable funds increases the equilibrium interest 2) When the government budget deficit rises, national saving is reduced, interest [13) Alberta buys a paint sprayer and a lift for her car customizing shop. A [14] Some degree of unemployment is inevitable in a complex economy. macroeconomist would refer to these purchases as investment. (1s) The natural rate of unemployment is a type of unemployment that does o 9 (161 Fulltime students and homemakers are included in away on its own even in the long run. Statistics'"unemployed category.

Answer 1

1)True because every transaction has buyer and seller, total expenditure in the economy must equal to total income in the economy.

Every dollar of spending by some buyer is a dollar of income of some seller.

2)false, because it is the market value produced by every one in an economy.

3)True

GDP deflator

GDP deflator = Nominal GDP / Real GDP × 100.

10000/8000*100

125

4)false, GDP per capita is the gross domestic product of a country divided by its total population. If a country has a high GDP (per person, life expectancy and literacy rate) but also a large population, its GDP per capita may be lower than a country with a lower GDP but smaller population.

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