Question

Which approach of definition is followed if GDP is defined as GDP= C+I+G+(X-M)?

	a.	income approach
	b.	expenditure approach
	c.	intermediate approach
	d.	total approach

An example of a lag associated with Fiscal Policy is

	a.	building permits
	b.	incomplete lag.
	c.	legislative lag.
	d.	Classical lag.

John has an engineering degree from a good university, but the only job he was able to find was in Wal-Mart as a cashier. This is an example of

	a.	cyclical unemployment
	b.	recessionary unemployment
	c.	inflationary unemployment
	d.	structural unemployment

Answer 1

1) Ans is B.

Expenditure approach means GDP is equal to the total expenditure on final goods and services on the goods produced in our domestic territory. Thus Y=C+I+G+NX

2)ans is C

legislative lag is associated with fiscal policy lag

3) ans is D.

Structural unemployment is unemployment caused due to structural change of the industry I.e. industry reorientation/ patter is changed.