Chapter 4 - Prep Quiz

Question 1

Fill in the blank: ​_______ good is an item that is produced by one​ firm, bought by another​ firm, and used as a component of a final good or service.

1. Component
2. Incomplete
3. Intermediate
4. Nonspecific

Answer 1

Ans. is #3 – intermediate

Question 2

What focuses more on production? Real GDP or Nominal?

Answer 2

Real – because it focuses on production rather than if prices went up despite no production (nominal)W

Question 3

What is an example of gov. expenditure?

1. The payment of unemployment benefits
2. The purchase of office supplies for the finance minister
3. The payment of subsidies to farmers  
4. The income received by lobbyists from the interest groups that they represent

Answer 3

2. The purchase of office supplies for the finance minister

Question 4

What is the formula for GDP at basic prices?

Answer 4

= Compensation + Other factor incomes + Depreciation + (Indirect taxes−Subsidies)

Question 5

What kind of good is a second hand jeans considered?
1. Intermediate
2. Final
3. Neither intermediate or final

Answer 5

3. Neither intermediate or final

Question 6

Biscuits bought by a company and served to customers is an example of a ___ good

1. Intermediate
2. Final

Answer 6

1. Intermediate, b/c bought by company and company isnt the one consuming