Page 52 - Macroeconomics. book docx_Neat

• B. The real increase in capital stock

• C. Depreciation value

• D. Inventory changes

14. The spending approach mainly focuses on:

• A. Demand in the economy

• B. Income distribution

• C. Costs of production

• D. Population growth

15. The foreign sector in the spending approach includes:

• A. Households and firms
• B. Government and firms

• C. Consumption and saving

• D. Exports and imports

True / False Questions

1. The spending approach measures national income through total expenditure.

2. Consumption is spending by firms.

3. Investment includes spending on machines and equipment.

4. Transfer payments are included in government spending.

5. Net investment shows the real increase in capital stock.

6. Imports increase national income.

7. Consumption is usually the largest component of spending.

8. Investment means buying shares in economics.

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