QUESTION 11 Net domestic product is the total value of A all final goods and ser

Question

QUESTION 11 Net domestic product is the total value of A all final goods and services produced within a country's borders in a year B only intermediate goods produced within a country's borders in a year. o C all tinal goods and services produced within a country's borders in a year minus gross private domestic investment D only intermediate goods produced within a country's borders in a year plus gross private domestic investment . E all tinal goods and services produced vithin a country's borders in a year minus capital consumption allowance QUESTION 12 The real balance effect is one of the A reasons why an AD curve is downward-sloping B shifters of an AD curve. C reasons wity a short-run aggregate supply curve can be derived D shifters of a short-run aggregate supply cu QUESTION 11

Explanation / Answer

Gross domestic product is the value of all the final goods and services produced in a country in a year.

Net domestic product is the value of gross domestic product minus depreciation. Depreciation is also termed as capital consumption allowance.

Hence, Option (E) is True.

Real balance effect is a change in aggregate expenditures on real output made by the comsumer, government, and foreign sectors that results because a change in the price level alters the purchasing power of money. This effect is related to the relation between the output and the price levels in the economy. Therefore, it is one of the reasons why Aggregate Demand curve is downward sloping. Hence, Option (A) is True.

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