The Bigdrill company drills for oil, which it sells for $200 million to the Bigoil company to be made into gas. The Bigoil company's gas is sold for a total of $600 million
What is the total contribution to the country's GDP from companies Bigdrill and Bigoil? A) $200 million
B) $400 million
C) $600 million
D) $800 million
C
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Automatic stabilizers decrease the impact of a recession on the level of economic activity because they
A) reduce the interest rate and so allow firms to increase their level of investment. B) mean disposable income does not change by as much as real GDP. C) increase taxes so the budget is always balanced. D) raise the exchange rate so U.S. exports become more attractive to foreigners. E) increase the quantity of money in circulation.
To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries?
A) the flexibility of U.S. labor markets and the efficiency of the U.S. financial system B) the high level of unemployment benefits the United States pays relative to other countries like Canada C) the strict government rules in the United States that regulate a firm's ability to hire and fire workers D) the low rate of job mobility in the United States
Most people buy salt infrequently and in small quantities. Even a doubling of the price of salt is likely to result in a small decline in the quantity of salt demanded. Therefore
A) the price elasticity of demand for salt is greater than 1 (in absolute value). B) the demand for salt will be perfectly inelastic. C) salt is a normal good. D) the demand for salt is relatively inelastic.
If a firm takes the wage as given, then the firm's marginal expenditure on labor curve is
A) above the labor supply curve. B) below the labor supply curve. C) the same as the labor supply curve. D) upward sloping.