Question

question 2 (1 point)
for an economy as a whole, income must equal expenditure because
a every dollar of spending by some buyer is a dollar of income for some seller.
b the number of firms is equal to the number of households in an economy.
c international law requires that income equal expenditure.
d equilibrium in the credit market will equate income and expenditure.
e every dollar of saving by some consumer is a dollar of spending by some other consumer.

question 3 (1 point)
an italian company operates a pasta restaurant in the u.s. the value of the output produced by this pasta restaurant is included in
a u.s. gdp and italian gdp
b u.s. gdp only
c u.s. gnp and italian gnp
d u.s. gnp and italian gdp
e u.s. gdp and italian gnp

Explanation:

Question 2

In an economy, when a buyer spends a dollar, that dollar becomes income for the seller. This is a fundamental principle in economic accounting. For example, if a consumer buys a product for $10, the firm selling the product earns $10 as income. Options b (number of firms and households equality is not the reason), c (not an international - law requirement), d (credit - market equilibrium is not the core reason here), and e (saving - spending relation is not the direct reason for income - expenditure equality for the whole economy) are incorrect.

GDP (Gross Domestic Product) measures the value of goods and services produced within a country's borders. Since the pasta restaurant is operating in the U.S., its output is part of U.S. GDP. GNP (Gross National Product) measures the value of goods and services produced by a country's residents (both domestic and abroad). The Italian company is an Italian resident, but the production is in the U.S. So it is not part of Italian GDP (which measures production within Italy) and not part of U.S. GNP (which measures production by U.S. residents).

Answer:

a. every dollar of spending by some buyer is a dollar of income for some seller.

Question 3