If a firm sold $700 worth of goods that cost $800 to produce:
A. aggregate income would still equal GDP.
B. aggregate income would no longer equal GDP.
C. the firm's loss would not be added to aggregate income.
D. aggregate income would be negative.
Answer: A
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A) a recessionary gap; rise B) a recessionary gap; decline C) an inflationary gap; rise D) an inflationary gap; remain at the natural level E) a recessionary gap; remain at the natural level
US Exports After staying around 1.35 US dollars per Euro for years, the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014 . What affect does this have US exports to Europe?
During periods of stagflation, what happens to output and prices in the economy?
By reducing consumption expenditures, poor nations should be able to completely finance their own capital investment.
Answer the following statement true (T) or false (F)