If government sets price supports on agricultural goods that are above equilibrium prices, what must the government do to maintain those prices?
It ultimately would have to purchase some of the good. Why? Because consumers would buy less at the
higher price, and farmers would supply more, creating an excess supply. Who will take that excess supply
off the market? The government must—otherwise the forces of excess supply will drive price back to
equilibrium.
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Transfer payments are excluded from government purchases in GDP accounting because
A) they are a reward to individuals who have been productive their entire lives. B) they are difficult to measure. C) nothing is being produced in return for the payment. D) they are already included as part of investment.
When a variable is determined by a factor outside of the function or model being evaluated, it is said to be
A) endogenous. B) exogenous. C) unexplained. D) statistically insignificant.
Which of the following is likeliest to have increased at point B?
a. real wealth
b. household debt
c. consumer spending
d. consumer confidence
Nothing raises the standard of living more than a greater
A. abundance of goods. B. effort of production. C. population. D. number of import tariffs. E. All of the above are true.