Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so, how?
What will be an ideal response?
We would double count if we counted directly the value of intermediate goods and services, because their value shows up in the value of the final goods and services in which they are a part.
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A cottage industry exists in the home-manufacture of ‘country crafts'. Especially treasured are handmade quilts. If the fourth completed quilt took 30 hours to make, and the eighth quilt took 28 hours. What is the percentage learning?
a. 5% b. 6.7% c. 10% d. 100% e. 122%
In its day-to-day operations, the Fed focuses on
a. an unemployment rate target b. an inflation rate target c. an interest rate target d. a money demand curve target e. several economic targets together
Usually when a monopoly that isn't a natural monopoly is broken up, the losses to the producer outweigh the gains to consumers.
a. true b. false
One reason that college graduates earn higher wages than non-graduates is because:
A. college graduation serves as a signal of the individual's productivity. B. there are no additional skills learned in college that increase productivity. C. college graduates are always less intelligent than non-college graduates. D. college graduates are less equipped to deal with technological change, as their skills are technology-specific.