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Mankiw 5e Chapter 2
Mankiw 5e Chapter 2
Which of the following is a flow variable? A. The value of the house in which you liveB. The balance in your savings accountC. Your monthly consumption of hamburgersD. The number of hamburgers in your refrigerator at the beginning of the month0 out of 1Incorrect. The correct answer is C. As explained in Section 2-1, a flow is a quantity measured per unit time and a stock is a quantity measured at a given point in time.
Which of the following is not a stock variable? A. Government debtB. The labor forceC. The amount of money held by the publicD. Inventory investment1 out of 1Correct. The answer is D. Inventory investment is a quantity measured per unit time, so it is a flow variable. See Section 2-1.
GDP is A. a stock.B. a flow.C. both a stock and a flow.D. neither a stock nor a flow.1 out of 1Correct. The answer is B. GDP is a quantity measured per unit time, so it is a flow. See Section 2-1.
GDP measures A. expenditure on all final goods and services.B. total income of everyone in the economy.C. total value-added by all firms in the economy.D. all of the above.0 out of 1Incorrect. The correct answer is D. See Section 2-1 for a discussion of what GDP measures.
Suppose that a farmer grows wheat and sells it to a baker for $1, the baker makes bread and sells it to a store for $2, and the store sells it to the customer for $3. This transaction increases GDP by A. $1.B. $2.C. $3.D. $6.1 out of 1Correct. The answer is C. As explained in Section 2-1, GDP includes only the value of final goods. Therefore, this transaction increases GDP by $3.
Which of the following is not included in GDP? A. The salary paid to a federal judgeB. The value of housing services enjoyed by homeownersC. The value of automobile services enjoyed by car ownersD. The value-added of a shipping company that transports goods from the factory to retail stores1 out of 1Correct. The answer is C. In principle, GDP should i
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