Question

12) 12) In the circular flow model, A) firms are sellers of goods and services in goods markets. B) households are buyers of goods and services in the factor markets C) households are sellers of factor services in goods markets. D) firms are sellers of the factors in factor markets. B) firms are buyers of goods and services in final markets 13) 13) Which one of the following is an income flow from firms to households? A) goods and services B) factor services C) payments for goods and services D) payments for factor services E) loans 14) 14) For the aggregate economy, income equals A) expenditure equals GDP only if there is no depreciation. B) expenditure, but these are not generally equal to GDP C) expenditure equals GDP only if there is no government or foreign sectors D) GDP, but expenditure is generally less than these. E) expenditure equals GDE 15) Which of the following would be an example of a consumption expenditure? A) More spending by the govemment on children's programs B) The purchase of a new car by the IPSCO steel company C) An increase in welfare payments to single mothers D) The purchase of a new car by the Singh household. E) All of the above. 16)- 16) An art collector recently sold a piece of pottery for $300. He had purchased it for $200 two years earlier. How will the most recent sale affect GDP? A) GDP will increase by $300. B) GDP will increase by $100. C) GDP will increase by $200. D) GDP 2 years ago must be adjusted downwards by $200, and current GDP will rise by $300. E) GDP will not change. 17 17) Which one of the following would not be counted as part of this year's GDP? A) The purchase of a house that was produced in the current year B) The purchase of wheat that was produced in the current year by a Saskatchewan farmer C) The govemment bond you buy for your newborn niece. D) The purchase of a new personal computer that was produced in the current year E) The lumber you purchase when building bookshelves for your room. 18) How much would the production of a kayak add to CDP if the shell costs $250, the paint costs $20, 18) the finisher costs $35, the manufacturer sold it to the dealer for $500, and the dealer sold it to his customer for $800? C) $1,300 D) $500 E) $800 B) $1,605 A) $305

Answer 1

12) Solution: firms are sellers of goods and services in goods markets.

Explanation: In the circular flow model, firms will be sellers of products and services in goods markets.

13) Solution: Payments for factor services.

Explanation: Payments for factor services is an income from firms to household

　

14) Solution: expenditure equals GDP

Explanation: In aggregate economy the expenditure equals GDP

　

15) Solution: The purchase of a new car by the Singh household.

Explanation: The purchase of a new car by the Singh household is an example of consumption expenditure

　

16) Solution: GDP will not change

Explanation: In GDP will remain unaffected for a purchase two years ago

　

17) Solution: The government bond you buy for your newborn niece

Explanation: In The government bond purchased for newborn niece will not be counted as part of this year's GDP.