Read each statement below and indicate if the statement is TRUE or FALSE - Leaving Cert Economics - Question 5 - 2018
Question 5
Read each statement below and indicate if the statement is TRUE or FALSE. [Tick (✓) the correct box.]
‘Double counting’ could occur when economic activity is measur... show full transcript
Worked Solution & Example Answer:Read each statement below and indicate if the statement is TRUE or FALSE - Leaving Cert Economics - Question 5 - 2018
Step 1
‘Double counting’ could occur when economic activity is measured using the expenditure method.
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Answer
This statement is TRUE. Double counting can occur if multiple measures of economic activity inadvertently include the same transactions more than once, particularly when measuring total expenditures in the economy.
Step 2
Exports represent an injection into the circular flow of income.
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Answer
This statement is TRUE. Exports increase the flow of income in the circular flow model, as they represent spending by foreign entities on domestic goods and services.
Step 3
Gross Domestic Product (GDP) includes a provision for depreciation.
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Answer
This statement is FALSE. GDP measures the total market value of all final goods and services produced in a country in a given period and does not include depreciation. Depreciation is accounted for in other measures like Gross National Product (GNP).
Step 4
Primary school teacher salaries are categorised as transfer payments in Ireland.
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Answer
This statement is FALSE. Primary school teacher salaries are not classified as transfer payments; they are considered expenditures on services provided by the government.
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