Reference no: EM13316392

1. The largest component of consumption expenditures is_______________.

a) durable goods

b) nondurable goods

c) services

d) all of the above are equal

e) none of the above is correct

2.The largest sector of gross investment is ________________________.

a) plant and equipment

b) inventory

c) residential housing

d) business durables stocks and bonds

3. Which statement is true?

a) Americans save much more of their incomes than they did 20 years ago.

b) In 2009, business saving was increasing while government saving was decreasing as a percent of GDP.

c) Although the U.S. does not have the highest saving rate in the world, Americans save more money than citizens of every other country

d) Our APS has been negative since the early 1900's.

4. Inventory investment is _______________.

a) always positive

b) always negative

c) can be either positive or negative

d) can be neither positive nor negative

5. Since 1995 Americans have been spending _____________________.

a) a larger percentage of their incomes on services

b) smaller percentage of their income on services

c) about the same percentage of their income on services

6. to build up our capital as a society we need to ______________________.

a) save more and consume more

b) save more and consume less

c) save less and consume less

d) save less and consume more

e) none of the above will help build our capital

7. Gross business investment in the U.S. economy amounts to approximately _______________.

a) 3-5% of GDP

b) 10-12% of GDP

c) 15-17% of GDP

d) 20-22% of GDP

e) 27-29% of GDP

8. The largest single sector comprising GDP is the _______________.

a) net exports/ Imports sector

b) business investment sector

c) consumption sector

d) government purchases sector

9. Which is more important to the success of the U.S economy?

a) consumption expenditures because they amount to 2/3 or more of GDP

b) business investment expenditures because capital formation is the source of growth

c) both consumption expenditures and business investment expenditures are important because they impact the economy differently

d) neither consumption expenditures nor business investment is vital to the success of the U.S. economy

e) none of the above is a correct statement.

10. The smallest component of C is __________________________.

a) durable goods

b) services

nondurable goods