25 Imagine a free market in equilibrium. After a sudden decrease in demand (but

ID: 1150575 • Letter: 2

Question

25 Imagine a free market in equilibrium. After a sudden decrease in demand (but before the price can adjust), the market experiences a:

Select one:

a. new equilibrium.

b. no change.

c. shortage.

d. surplus.

Question 26

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26 The difference between real GDP and nominal GDP is that:

Select one:

a. Real GDP adds in home production

b. Real GDP subtracts out taxes

c. Real GDP leaves out production performed by the government

d. Real GDP has been adjusted for inflation

Question 27

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27 Which of the following is NOT a spending component in the national spending equation?

Select one:

a. Government purchases

b. Net exports

c. Investment spending

d. Taxes

e. Consumption spending

Answer.)

Q25.) D.) Surplus

Q26.) D.) Real GDP has been adjusted for inflation.

Real GDP = nominal GDP - expected inflation

Q27.) D.) Taxes

Since taxes are treated as leakages, this is not a spending.

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