In a macroeconomic model without foreign trade or a government, aggregate demand is the sum of
Personal saving and private investment
Personal saving and persoanl consumption
Personal consumpton and private investment
Private investment and private consumption
If the government increases spending and raises taxes by just enough to finance this increase it will
Leave output unchanged
Increase output
Reduce output
Increase the MPC
In the circular flow of income , saving is an injection and investment is a
A leakage
An injection
An intermediate good
A final good
In an open economy leakages to imports _______ the value of the multiplier.
Reduce
Increases
Do not change
Constant
An economy which has economic relations to other countries is known as
Closed economy
Open economy
Self reliant economy
Mixed economy
Leakages from the circular flow are
Investment , savings, government expenditure
Savings,taxes,net of subsidies, imports
Consumption, investment, government expenditure
Consumption , taxes,imports
If desired spending in the economy exceeds income we would expect
Households to save more
Firms to produce less
Firms to produce more
The MPC to change
Which two of the following are excluded when measuring National income?
Value added in the output method
Transfer payments in the income method
Value of intermediate inputs in the output method
Consumer spending in the expenditure method
Mountains and rivers are
National capital
National wealth
Real capital
International capital
To move from GDP to GNP we must add to GDP the
Depreciation of plant and equipment
Subsidies minus taxes
Net property income from abroad
Taxes minus subsidies
