6. Which of the following do national income accountants consider to be investme

Question

6. Which of the following do national income accountants consider to be investment?
A. The purchase of an automobile for private, nonbusiness use.
B. The purchase of a new house.
C. The purchase of corporate bonds.
D. The purchase of gold coins.

7. In comparing GDP data over a period of years, a difference between nominal and real GDP may arise because:
A. of changes in trade deficits and surpluses.
B. the length of the workweek has declined historically.
C. the price level may change over time.
D. depreciation may be greater or smaller than gross investment.

8. If real disposable income fell during a particular year, we can conclude that:
A. personal taxes increased.
B. inflation occurred.
C. transfer payments declined.
D. none of these necessarily occurred.

Refer to the diagram. The base year used in determining the price indices for this economy:
A. cannot be determined from the information given.
B. is some year before 2000.
C. is more recent than 2000.
D. is 2000.

10. (Consider This) Capital is a:
A. flow, whereas gross investment and depreciation are stocks.
B. flow, as are gross investment and depreciation.
C. stock, as are gross investment and depreciation.
D. stock, whereas gross investment and depreciation are flows.

Explanation / Answer

Ans.(c) purchase of corporate bonds

National income is the sum of all forms of gross income, similar to the gross salary appearing in a paycheck of an employee, that is before various taxes and other deductions are taken out.

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