When computing gross domestic product, government services are valued at the
A. price consumers pay for them.
B. value of the resources used to produce them.
C. value of comparable outputs from the private sector.
D. value of taxes collected from consumers.
Answer: B
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Potential GDP is reached when
A) unemployment is zero. B) there is no cyclical unemployment. C) unemployment is above full employment. D) unemployment is below full employment. E) the natural unemployment rate equals zero.
Which of the following models explains why high unemployment has persisted in some European countries for such long periods—periods too long to be the result of fixed money-wage contracts or backward-looking price expectations?
a. Insider outsider models b. Efficiency wage models c. Sticky price models d. IS-LM models
The finite nature of the economy's resource base:
a. will be solved if only we would learn to conserve. b. is only a problem in developing countries. c. will be solved as technology advances. d. will always be with us.
If banks faced a 100 percent reserve requirement, a $10,000 addition to banking reserves would increase the money supply by:
a. $100 b. $1,000. c. $10,000. d. $100,000.