1.

(02.01 HC) The table below shows the dollar value of sales and intermediate purchases for a small island country's three primary industries.

	Hardwoods	Woven Baskets	Furniture
Sales	$10 million to furniture manufacturers	$5 million to furniture manufacturers	$30 million to consumers
Intermediate Purchases of Factors	$0	$0	$15 million

Which of the following statements about these manufacturers is accurate? (5 points)

	These three industries combine to add $45 million to the country's GDP.
	The total income earned across the three industries is $45 million.
	The total value added by the hardwood board and woven basket manufacturers is $15 million.
	The furniture industry's combined land, labor, capital, and profit equals $45 million.
	These three industries' aggregate expenditures total $60 million.

2.

(02.01 MC) Which method for counting gross domestic product focuses on the money paid for all the factors of production as well as profits earned by business owners? (5 points)

	The expenditures approach
	The circular flow model
	The income approach
	The value-added approach
	The consumer purchases approach

3.

(02.01 MC) According to the circular flow model, which of the following should always be equal? (5 points)

	Imports and exports
	Wages and transfer payments
	Consumption and investment in an economy
	Government spending, consumer spending, and business investment
	Total income and total expenditures in an economy

4.

(02.01 MC) Which of the following would be added to the gross domestic product of the United States? (5 points)

	$25 million in garage sale purchases
	$1.2 trillion in interest earned on savings accounts
	$800 million increase in business inventories
	$400 billion in stimulus checks from the federal government
	$2 billion worth of steel sold to American auto manufacturers

5.

(02.01 MC) In a given year, businesses invest $2 trillion, exports total $1.5 trillion, imports total $3 trillion, consumers spend $5 trillion, and the government spends $1.5 trillion on final goods and services. Based on this, which of the following statements is true? (5 points)

	The net exports are $4.5 trillion.
	The gross national income must be $8.5 trillion.
	The gross domestic product must be $8.5 trillion.
	The total value added in the economy for that year must equal $7 trillion.
	The country is in a recession.