Which of the following would increase GDP?
a. You buy 100 shares of Wal-Mart stock.
b. Your car is destroyed by a fire, and you purchase a two-year-old car to replace it.
c. Your car is damaged by a fire, and you hire a mechanic to repair it.
d. Your car is damaged by a fire, and you reduce the number of hours you work to repair the car yourself.
C
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The price index was 136 in one year and 142 in the next year. What was the inflation rate between the two years?
a. 1.04 percent b. 4.41 percent c. 6.00 percent d. 42.00 percent
Suppose that a consumer has a marginal propensity to consume of 0.7. If this consumer earns an extra €2, her consumption spending would be expected to increase by:
A. €0.60. B. €0.70. C. €1.40. D. €1.70.
The most important thing about higher labor productivity is that it means
A. we can achieve a happier population. B. we can compete well with other nations. C. we can have a higher standard of living. D. we are doing better than anyone else is.
Exhibit 16-3 Money market demand and supply curves
In Exhibit 16-3, assume an equilibrium with an interest rate of 15 percent and the money supply at $100 billion. The Fed uses its policy tools to move the economy to a new equilibrium at E2 with money supply of $150 billion and an interest rate of 10 percent. This change could be the result of a(n):
A. open market sale of securities by the Fed. B. higher discount rate set by the Fed. C. higher required-reserve ratio set by the Fed. D. open market purchase of securities by the Fed.