6. Which of the following represents the formula to calculate GDP using the expenditure approach?

C + I + Yd + Xn

Yd = C + G + I

C + I + G + Xn

C - I - G + Xn

7. Which of the following is the largest component of GDP?

Consumer Spending

Investment Spending

Government Spending

Net Exports

8. What is a transfer payment?

Payments from firms to households for the sale of resources.

Payments from households to the government to help fund 'G.'

Payments from the government to households to increase disposable income.

Payments from firms to the government to increase government spending.

9. Which of the following best explains why transfer payments are not included as 'G' in the calculation of GDP?*

Recipients of transfer payments are mostly retired and do not contribute to GDP anymore.

Transfer payments represent too small a contribution to the calculation of GDP.

Transfer payments already factor into GDP through consumer spending.

Transfer payments are used mostly to buy used/second-hand goods which are no longer counted in the calculation of GDP.