If an economy’s gdp falls. then it must be the case that the economy’s

If an economy’s GDP falls, then it must be the case that the economy”s A. Income and saving fall B. Income and market value of all production both fall. C. Income falls and market value of all production rises. d.Income rises and market value of all production falls. 2. Gross Domestic product measures a. Income and expenditure. B. Income c. Expenditure. d. Neither. 3. If all quantitites produced in the uNited states rise by 13.4% and all prices fall by 13.4% which of the following occurs? Does Real GDP rise or fall? Does nominal GDP rise or fall? 4. Which of the following does not add to US GDP? a. The federal gov. Sends a socia securit check to your grandmother. b. CIty of new york pays a salary to a policemen. c. Air france buys a plane from Boeing, the uS aircraft manufacturer. 5. IS the best single measure of a societys economic well-being the unemployment rate or the GDP? 6. Keynesian economics was developed by John Keynes in response to: A. The great recession. b. The great depression. C. Out of control gov. spending. 17. For an economy as a whole, a. Wages must equal profit. b. consumption must equal incom. c. Income must equal expenditure. d. Consumption must equal saving. 8. As in the case f Ireland, Keynesian exonomics does not tend to work in countries which: a. Are large and self-sustaining. b. Are small and insulated. c. Are medium sized with good governments. d. Are smaller and are open to free (ish) trade. e. Are large and have free trade. Thanks! PLease be as detailed as you can.!

Answer

1.    A. GDP = PY So if GDP falls then either p or Y may fall or both fall. If income falls then saving will also falls as saving is directly related to income 2. A, GDP measure both income as well as expenditure by nationals of a country. Income what is earn as a factor payment is used to purchase the product from the market. 3. Real GDP (Y), Nominal GDP= GDP, Price = P GDP= PY dGDP/GDP=dP/P +dY/Y Real GDP is Change is quantity so it will rise by 13.4% while nominal GDP will remain unchanged. 4. A, transfer payment are excluded from counting of US GDP. 5. GDP is best measure of society well-being, as unemployment rate and GDP are indirectly related, and GDP measure the standard of living of people in monetary terms. So using GDP we can measure both. 6. B, Keynesian economics was developed in response to great depression to show the impact of expansionary fiscal policy impact on economy. 7. C income must equal expenditure, as what is earn as a factor payment is used to purchase the goods and services from the market.

8. D, small and open to free trade, as world economy will have large impact on domestic economy.

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