Question

please answer all

The components of GDP are: Select one: O a. Consumption, government spending, net exports, and investment. O b. Exports, imports, investment, and disposable income. O c. Consumption, exports, imports, and disposable income. O d. Consumption, inventory, government spending, and disposable income. Question 19 Not yet answered Points out of 1.00 P Flag question The crowding out effect refers to a decrease in: Select one: O a. Consumption or investment as a result of an increase in government borrowing. O b. Government spending resulting from a decrease in taxes. O c. Consumption resulting from an increase in investment O d. Investment resulting from an increase in consumption and a decrease in savings.

Answer 1

1^st MCQ:

Answer: a

The components are C, GS, NE, and I under the payment approach of calculating GDP.

No incomes are included there and inventory should not be calculated separately, since payments create inventory as well.

2^nd MCQ:

Answer: a

The effect indicates an increasing participation on economic activities by the government that decreases consumption and investment. In the process of such effect, government borrowing increases which increases the market interest rate and leads to a lower consumption and private investments.

3^rd MCQ:

Answer: a

This is the transaction of assets, which has long-term future benefits; therefore, this is the capital account.

Trade and unilateral transfer come under current account, but not capital account.