TRUE OR FALSE
If the statement is true, skip it. If the statement is false, write a sentence that explains why the statement is false.
1. Economic activity in Vietnam can be measured as the value of goods and services produced, as the total of factor incomes or as the value of total spending on goods and services.
2. The value of total incomes in Vietnam is equal to the value of total sales because of the way profits are defined.
3. In market economies firms borrow money in financial markets by selling financial assets to households.
4. In the U.S., aggregate income is only about two thirds as large as aggregate expenditure.
5. In the U.S., the government undertakes three major economic activities. It buys goods and services, it collects taxes and it sells financial assets (borrows money).
6. Since Vietnam is a net importer goods and services, it is likely that Vietnam is a net importer of financial assets as well.
7. Household saving in Viet Nam is the portion of Vietnamese disposable income that is not spent on luxury items.
8. In most market economies the income of the business sector, considered as a whole, will exceed the expenses of the business sector. And if the household sector is considered as a whole, its expenses generally exceed its income.
9. The total of Consumption, Investment, Government Spending and Net Exports is called GDP at Market Price.
10. Gross Private Domestic Investment does not include additions to inventories.
11. GDP at Market Prices is equal to the total of Wages plus Interest plus Rents plus Profits.
12. Depreciation is deducted from corporate profits. Therefore it must be added to Net Domestic Product in order to get GDP.
13. If we sum the value added of all sectors of the Vietnamese economy, we will get the aggregate income of Vietnam.
14. Vietnamese GDP is equal to the total value added in Vietnam plus Depreciation plus Indirect Taxes less Subsidies.
15. The GNP of Vietnam is equal to its GDP plus Net Property Income from Abroad.
16. In all countries, the GNP is considerably larger than the GDP.
17. In the U.S. the Consumer Price Index (CPI) is calculated by dividing the current cost of a fixed market basket of goods by the cost of the same market basket in the base period and then multiplying the result by 100.
18. Because it uses a fixed market basket of goods, the U.S. Consumer Price Index probably over-estimates the true increase in the cost of living.
19. The real GDP of Vietnam in 1996 can be calculated by valuing the goods and services produced in 1996 at base year prices.
20. It is possible for a Vietnam to have an increasing per capita GDP and at the same time have a declining state of economic welfare.
FILL IN THE BLANKS
1. __________________ Income is equal to Aggregate Income minus Net Taxes.
2. Injections into the circular flow of income include: Investment, Government purchases of goods and services and ____________________________.
3. Leakages from the circular flow of income include; Saving, Net Taxes and _________________________.
4. Net Domestic Income at factor cost plus Indirect taxes and less Subsidies is equal to __________________________ at market prices.
5. Gross Investment is equal to net capital formation plus _________________.
6. The __________________________ of a firm is equal to the total revenue of the firm, less the value of the intermediate goods used by the firm.
7. The _______________________________ of Viet Nam refers to the total value of output owned by the residents of Viet Nam.
8. The _______________________________ is calculated by dividing nominal GDP by real GDP and then multiplying the result by 100.
9. The rate of growth of Vietnamese per capita real GDP is equal to the rate of growth of Vietnamese GDP minus the rate of growth of the Vietnamese __________________.