Investment is a _______________ that ______________ the _____________ of capital.

stock; decreases; stock
stock; increases; flow
flow; increases; stock
flow; adds to; flow

When _______ is greater than _______, saving increases _______.

consumption expenditure; government expenditures; wealth
income; consumption expenditure; wealth
income; government expenditures; wealth
income; consumption expenditure; investment

If the government budget is balanced and investment is equal to saving, then _____________.

the country does not trade internationally
exports equal imports
net exports are positive
net exports are negative

Which of the following items is not a component of the expenditure approach to measuring Canadian GDP?

purchases of Canadian-made aircraft by Europeans
transfer payments made by the government
purchases made by families
purchases of new computers by businesses and farms

Which of the following items is not a component of the factor incomes approach to measuring Canadian GDP?

income earned by businesses that export goods
investment
interest earned on savings deposit
profits made by businesses

Which of the following items are counted in GDP? A taxi company's ___________________.

purchase of new trip metres for its cabs
purchase of 5 new cabs
sale of 5 old cabs
sale of some bonds to finance its purchases

GDP equals all of the following except _________________.

aggregate production
aggregate purchases of goods and services
aggregate income
aggregate expenditure

One year after the base year, deflation occurs. In this year, nominal GDP is ____________ real GDP, and the GDP deflator is _____________.

equal to; equal to 10
less than; less than 100
greater than; greater than 100
less than; greater than 100

If the price of one good in the CPI basket increases and people switch to a lower-priced substitute that is not in the CPI basket, then the price level measured by the CPI _________________.

might be either higher or lower than the actual price
is higher than the actual price level
is lower than the actual price level
is the same as the actual price level

Real GDP is not a good indicator of economic welfare because it _____________________.

excludes the underground economy
measures the value of time spent working but not the value of leisure time
does not include the pollution created by steel mills
all the above

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