Investment is a _______________ that ______________ the _____________ of capital.

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

When _______ is greater than _______, saving increases _______.

income; consumption expenditure; investment
consumption expenditure; government purchases; wealth
income; government purchases; wealth
income; consumption expenditure; wealth

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

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

Which of the following items is not a component of the expenditure approach to measuring GDP in the United Kingdom?

purchases of cars made in the United Kingdom by Americans
purchases of new computers by businesses and farms
transfer payments made by the government
purchases made by families

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

income earned by self-employed people
profits made by corporations
second-hand goods
rent for use of land

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

purchase of new trip meters for its taxicabs
sale of some bonds to finance its purchase of taxicabs
purchase of 5 new taxicabs
sale of 5 old taxicabs

GDP equals all of the following except __________________.

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

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

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

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

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