An example of an increase in gross private domestic investment spending that also increases Gross Domestic Product (GDP) is when
A. a farmer buys a used tractor.
B. inventories of new cars accumulate on the lots of car dealers.
C. a family sells its home because of a transfer.
D. government increases spending on infrastructure.
Answer: B
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Which one of these conditions is not a part of asymmetric information?
A. parties are engaged in and economic transaction. B. information is not uniform. C. the government usually intercedes to fix the problem. D. all of these answer options are correct.
If the price elasticity of supply is 0.75, it would imply that a _____
a. a 100 percent increase in price would increase the quantity supplied by 75 percent b. doubling of the price would increase the quantity supplied by 175 percent c. 50 percent increase in price would increase the quantity supplied by 25 percent d. 75 percent increase in price would increase the quantity supplied by 100 percent e. 120 percent increase in price would increase the quantity supplied by 90 percent
During a severe recession, the government decides to lower its tax rates to give consumers relief, and allow them to pay less in taxes. This is an example of:
A. an automatic stabilizer. B. expansionary fiscal policy. C. contractionary fiscal policy. D. discretionary fiscal policy.
If the reserve ratio is 0.1, the money multiplier will be:
A. 10. B. 1,000. C. 100. D. 1.