Page 49 - Macroeconomics. book docx_Neat

This approach prepares students to study the output approach, which focuses on GDP,

GNP, value added, and double counting.

4.10 Summary

National income can be measured using the spending approach, which focuses on total

expenditure in the economy. Aggregate spending includes consumption, investment,

government spending, and net exports. This approach provides a clear understanding of
demand and economic activity.

Multiple Choice Questions (MCQs)

1. The spending approach measures national income through:

• A. Total savings

• B. Total income earned

• C. Value added

• D. Total spending

2. Consumption spending is mainly carried out by:

• A. Firms
• B. Government

• C. Households

• D. Foreign sector

3. In economics, investment refers to spending on:

• A. Consumer goods

• B. Capital goods

• C. Shares and bonds

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