Page 51 - Macroeconomics. book docx_Neat

• C. C − I

• D. X − M

9. Replacement investment aims to:

• A. Increase production capacity

• B. Create new factories

• C. Improve technology

• D. Replace worn-out capital goods

10. Which of the following is included in government spending?

• A. Pensions

• B. Salaries of public employees
• C. Social assistance

• D. Unemployment benefits

11. Imports are subtracted in the spending approach because they are:

• A. Produced abroad

• B. Produced locally

• C. Government goods

• D. Final goods

12. Investment is important because it:

• A. Reduces income

• B. Increases consumption

• C. Increases productive capacity
• D. Reduces employment

13. Net investment shows:

• A. Total capital spending

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