1. consumers use their market power to push up prices,

2. resource owners use their market power to push up prices,

3. potential output is growing faster than real GDP,

4. real GDP is increasing faster than potential GDP

5. All of the above.

52. Personal income

1. is income received by individuals during a given year,

2. is the income individuals have available for spending during a given year,

3. equals national income less indirect taxes,

4. is the sum of wages plus interest received by individuals during a given yea

5. equals consumption plus saving.

53. Gross national product equals Gross domestic product plus

1. net indirect taxes;

2. net current transfers from abroad

3. net foreign factor income;

4. net exports;

5. none of the above.

54. Which of the following results in an increase in the value of the dollar:

1. Interest rates in the United States decrease.

2. Interest rates in foreign countries increase.

3. Price level in the United States increases.

4. Productivity in the United States increases.

5. Output in the United States increases.

55. As a measure of economic welfare, gross domestic product underestimates a country's production of goods and services when there is an increase in

1. The production of antipollution devices

2. Crime prevention services

3. The production of military goods

4. Household production

5. Legal services

56. When the economy is initially at a position of internal and external equilibrium, exchange rates are flexible, and domestic and foreign financial assets are perfect substitutes, an increase in government spending causes external imbalance and

1. A decrease in autonomous net exports as the dollar appreciates

2. A decrease in autonomous net exports as the dollar depreciates

3. An increase in autonomous net exports as the dollar appreciates

4. An increase in autonomous net exports as the dollar depreciates

5. A necessitates to the central bank to increase official reserves

57. Which of the following is NOT a component of national income?

1. wages of workers

2. salaries of civil servants

3. corporate profits

4. rental income

5. all of the above are components of national income

58. If imports exceed exports, we know with certainly that:

1. GNP exceeds GDP

2. GDP exceeds GNP

3. a budget deficit exists

4. a trade surplus exists

5. net foreign investment is negative

59. Suppose a bond pays $1000 in one year. If the price of the bond is $800, we know that the interest rate on this bond is:

(A) 8% (B)12.5% (C) 20% (D) 25% (E) 33%

60. A country experiences a rate of wage inflation twice that of its international competitors. At the same time, its currency appreciates because of an inflow of capital funds. Which of the following is most likely to occur?

1. A decrease in money supply

2. A decrease in the rate of unemployment

3. A decrease in profits

4. An increase in the volume of exports

(E) An increase in government spending