Posted: September 14th, 2017

One type of factor of production is physical capital.

One type of factor of production is physical capital.
All of the following are examples of physical capital EXCEPT
A) A hydroelectric power plant. B) Electrical engineers.
C) Buildings. D) Machinery.

2. Suppose that the price of cornflakes is $1 per box and price of oatmeal is $1.50 per box. Both boxes contain the same number of ounces of cercal. The relative price of cornflakes in terms of oatmeal is
A) 0.75. B) 1.0. C)0.67. D) 1.50.

3. If the demand for tea decreases when income falls, tea is
A) An inferior good. B) A substitute good.
C) A normal good. D) both complimentary and inferior.

4. Total planned expenditures in a closed economy are equal to
A) Consumption + savings + transfers + investment.
B) Saving + investment + government expenditures.
C) Investment + saving + transfers.
D) Consumption+ investment+ + government expenditures

5. Which of the following best describes a nation’s gross domestic product ?
A) The market value of all goods and services produced in the economy, including intermediate goods.
B) The total market value of all final goods and services produced in the economy during a year.
C) The constant dollar value of all goods produced in the economy during a year period.
D) The market value of all goods and services less depredation

6. The farmer pays $20 for the seed that is sold to the miller for $.35 the miller makes flour and sells it to the bake for $.55 The baker makers bread and sells it to the grocery store for $.80 and the store sells it to consumers for 1.00. the contribution to GDP is
A) $2.90 B) $1.90 C) $1 D) $.20

7. Social security payment are
A) Included in GDP.
B) Not include in GDP, but are included in Cross Domestic Income accounts.
C) Not include in GDP
D) Not include in GDP, but are included in Net Domestic Product.

8. Which of the following is an example of cross private domestic investment component of GDP?
A) You buy a share of GM stock. B) GM buys a new drill press.
C) You put money into your savings account. D) You put money into your checking account.
Table
Consumption expenditures on goods and services $1,500
Total government spending on goods and services 590
Cross private domestic investment 355
Imports 50
Exports 70
Depreciation (capital consumption allowance) 200
Indirect business taxes 75

9. According to the table, gross domestic product is

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