Tag: national income identity for open economy

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Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

In an open economy GDP is composed of _______.

  1. consumption, government spending

  2. gross investment

  3. net exports

  4. sum of all
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In an open economy the GDP is calculated as the sum of the 4 sectors of the economy. 

GDP = C + I + G + (X-M) 
         =Consumption + Investment + Government spending + Net exports

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

In an open economy GDP is the sum of ________.

  1. Consumption, Gross Investment, Government expenditure, Net export

  2. Consumption, Gross Investment, Government expenditure, Net import

  3. Consumption, Gross Investment, Government subsidy, Net export

  4. Consumption, Gross Investment, Net export, Personal saving
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The GDP is calculated using the formula

 $GDP = C + I + G + X - M$ 

Where: 
C = Consumption
I = Gross Investment
G = Government expenditure
X-M = Net export

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

DEPB stands for _______.

  1. Daily Export Pass Book

  2. Duty Exemption Pass Book

  3. Duty Entitlement Pass Book

  4. Double Export Pass Book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

DEPB stands for Duty Entitlement Pass Book, which was an export incentive scheme in India that allowed exporters to import goods duty-free based on the value of their exports.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

EOU stands for ______.

  1. Export Oriented units

  2. European Oil Union

  3. Export Oil Unity

  4. Excellent Official Unit
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 The Export Oriented Units (EOU) scheme was introduced to boost exports, increase foreign earnings and created employment in India. The EOU scheme is complementary to the scheme for Free Trade Zone, Export Processing Zone.

Multiple choice national income identity for open economy open economy macroeconomics determination of income and employment economics

Net exports are negative when __________.

  1. net investment is positive

  2. exports are exceeded by imports

  3. exports exceed private transfer to foreigners

  4. imports are exceeded by exports
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Net exports are calculated as exports minus imports. If imports exceed exports, the value of net exports becomes negative.