For an economy, aggregate demand equals:

For an economy, aggregate demand equals:
 a. consumption plus investment plus government spending plus exports.
  b. consumption plus investment plus government spending plus (exports minus imports).
  c. consumption plus investment plus (taxes minus transfers) plus (exports minus imports).
  d. consumption plus investment plus government spending plus net exports (imports minus exports).

QUESTION 2

Using the income approach, an estimate of the value of capital worn out producing GDP is:
 a. indirect business taxes.
  b. capital consumption allowance or depreciation.
  c. gross private domestic investment.
  d. capital erosion estimate.

QUESTION 3

The aggregate demand curve indicates the relationship between:
 a. the real wage rate and the quality of resources demanded by producers of goods and services.
  b. the interest rate and the amount of loanable funds demanded by borrowers.
  c. the natural rate of unemployment and the demand for goods and services when the economy is in long-run equilibrium.
  d. the general price level and the aggregate quantity of goods and services demanded.

QUESTION 4

Using the income approach, the smallest component in the calculation of GDP is:
 a. net interest.
  b. rental income.
  c. profits.
  d. compensation of employees.

QUESTION 5

Using the income approach, the largest component in the calculation of GDP is:
 a. net interest.
  b. rental income.
  c. profits.
  d. compensation of employees.

QUESTION 6

The Department of Commerce sums the payments made to resources to arrive at GDP in the form of wages, rents, interest, profits, indirect taxes, and depreciation. This method of deriving GDP is called the:
 a. opportunity cost approach.
  b. income approach.
  c. expenditure approach.
  d. monetarist approach.

QUESTION 7

Using the expenditure approach, GDP equals:
 a. C + I + G + (X  M).
  b. C + I + G + (X + M).
  c. C + I  G + (X  M).
  d. C + I + G  (X  M).