The largest component of GDP is
a. tax revenue
b. government purchases of goods and services
c. the nation's capital stock
d. private investment spending
e. private consumption expenditures
E
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In a perfectly competitive industry, in the long run:
A. firms earn a positive economic profit. B. firms earn zero economic profit. C. firms earn a negative economic profit. D. firms might earn a positive, zero, or negative economic profit.
The problem of dead capital can be eliminated by
A. making it easier for people to establish legal ownership of productive capital. B. restricting population growth. C. increasing the labor force participation rate. D. returning all privately owned capital to the government.
An oligopolist's effective demand curve will be kinked if the firm
a. is acting as a price leader in the industry. b. expects other firms to match price cuts but not price increases. c. expects other firms to match all price changes. d. fears new entry into the industry.
The U.S. factor of production that is most likely to be made worse off because of NAFTA (because its factor payment will fall) is
A) unskilled labor. B) skilled labor C) capital D) All of the above will be made worse off.