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1. In a private sector model


1. Household saving is a leakage from the circular flow


2. Investment is a spending injection


3. Saving leakages equal investment injections


4. All of the above




2. In an open economy model, GDP is the sum of


1. Consumption, gross investment, government spending, and net exports


2. Consumption, net investment, government spending, and net exports


3. Consumption, gross investment, government spending, and gross exports


4. Wages, rent, interest, profit, and depreciation




3. In a closed economy, three-sector model


1. Household saving equals net investment


2. Household Saving equals gross investment


3. Household saving plus depreciation equals gross investment plus government spending


4. Household saving plus taxes plus depreciation equls gross investment plus government spending




4. If personal income is $570, personal income taxes are $90, consumption is $430, personal interest payments total $10, and personal saving is $40, disposable income equals


1. $500


2. $480


3. $470


4. $400




5. When nominal GDP is $1100 and real GDP is $1000, the GDP deflator is


1. 9.09


2. 90.91


3. 1.11


4. 110




6. Suppose nominal GDP is $500 in year 1. If the GDP deflator doubles by year 6 while real output has increased 40% nominal output in year 6 is


1. $2000


2. $1400


3. $1000


4. $750




7. In the U.S.A. the labor force includes


1. Those who are employed and unemployed


2. Those who are employed


3. Those who are of working-age


4. The entire population




8. Frictional unemployment exists


1. When there is a decrease in real GDP


2. Because it takes time to find a job when one is first entering the labor force.


3. As a result of technological change


4. When an individual retires




9. The natural rate of unemployment equals the sum of those who are


1. Frictionally and structurally unemployed


2. Frictionally and cyclically unemployed


3. Structurally and cyclically unemployed


4. Frictionally, structurally, and cyclically unemployed




10. When there is no change in central bank holding of international reserves, a country's


1. Trade balance always equals 0


2. current account balance always equals 0


3. Capital account balance always equals 0


4. Balance of payments always equals 0