Question

1. Which of the following would be included in the expenditures approach to calculating U.S. GDP?

   	A.	wage and salary payments to U.S. workers
   	B.	interest paid on borrowed funds
   	C.	government payments of social security benefits
   	D.	purchases of new trucks by Federal Express
   	E.	wage payments to U.S. citizens working outside the U.S.

Which is true of the short-run macro model?

	A.	It is an attempt to explain why the economy tends to perform better in the short run than in the long run.
	B.	it was developed during the Great Depression by Keynes and helped to explain how spending affects economic fluctuation.
	C.	It was never popular after the 1930s.
	D.	It was developed during the early 19th century.
	E.	It explains the forces that work to drive the economy to full employment.

Answer 1

1.GDP by expenditure approach is the sum of consumption,private investment, government spending and net exports.Purchases of new trucks by federal express will be included in GDP by expenditure method.

Answer-D

2.The short run model was developed by Keynes during the great depression to explain short run fluctuations by changes in spending.

Answer-B