Question Details

Depreciation is defined as the


1) Gross domestic product is the
A) value of the final goods and services produced in a country during a specific time.
B) total amount that buyers spent on the final goods and services produced in a country
during a specific time.
C) total amount of income earned in producing the final goods and services in a country
during a specific time.
D) All of the above answers are correct.
2) Which of the following is correct?
A) Aggregate expenditure equals GDP but is less than aggregate income.
B) Aggregate income is greater than GDP but equal to aggregate expenditure.
C) Aggregate income is greater than aggregate expenditure but equal to GDP.
D) Aggregate income, aggregate expenditure and GDP are all equal.
3) GDP equals
A) C+S+G+(X-M)
B) C+I+G+(X+M)
C) C+I+G+(X-M)
D) C+S+G+(X-M)

4) Depreciation is defined as the
A) decrease in the stock of capital due to wear and tear.
B) increase in the stock of capital due to investment by firms.
C) increase in the stock of capital due to wear and tear.
D) decrease in the stock of capital due to investment by firms.
5) Suppose Mail Boxes Etc. buys a new copier for its store for $1000. A year later, when the firm
wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year
the copier was used, ________ has occurred.
A) replacement investment
B) gross investment
C) depreciation
D) net investment



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