1. The difference between nominal GDP and real GDP is that:

a)nominal GDP is adjusted for inflation but real GDP is not

b)real GDP excludes imports and exports

c)real GDP is adjusted for inflation but nominal GDP is not

d)nominal GDP measures only actual productivity

2. Which of the following is included in GDP?

a)the fees charged for a stock broker's services

b)the receipts from a sale of land

c)the value of lawn care service provided by a sixteen-year-old as part of his weekly chores

d)revenue from the sale of a three-year old car

3. The simple circular flow diagram shows that economic aggregates can be calculated either by the _____________ flows in the product market or by the ______________ flowing to households in the resource market.

a)spending; income

b)spending; output

c)income; spending

d)output; spending

4. Decreases in government spending ____ equilibrium income, and increases in taxes ____ equilibrium income.

a) increase; increase

b)increase; decrease

c)decrease; decrease

d)decrease; increase