Assignment Instructions/ Description
U.S. economy ended 2015 with slow growthGDP increased at an annual rate of 0.7 percent in the finalquarter of 2015. Government expenditure grew at the same0.7 percent rate, but consumption expenditure grew at a rateof 2.2 percent. Investment and net exports shrank.Source: BEA News Release, January 29, 2016Use the figure to indicte the flows in which the items in thenews clip occur.How can GDP increase by 0.7 percent if consumptionexpenditure increased at a 2.2 percent rate?In the figure, _______.A. Z is net exports and R is governmentexpenditure on goods and servicesB. W is government expenditure on goodsand servcies and V is consumptionexpenditureC. V is consumption expenditure and Z isnet exportsD. J is investment and V+W is consumptionexpenditureE. U is government expenditure on goodsand services and J is investmentIt is possible for GDP to increase by only 0.7 percent whenconsumption expenditure grew at a 2.2 percent rate because_______.A. intermediate goods are included in themeasurement of GDPB. total expenditure does not equal totalincomeC. there is a measurement errorD. the sum of investment and net exportsshrankE. the sum of investment and net exportsincreased by less than 2.2 percent
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