When the production process extends over more than one year, the value of the final product is:
A. included in GDP for the year in which production began.
B. allocated equally to GDP in each year.
C. included in GDP for the year in which production was completed.
D. allocated to GDP in each year according to the value added in that year.
Answer: D
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When social costs of an activity exceed private costs
A) there is a tendency for resources to be under-utilized. B) this means that resources are being efficiently used. C) there is a tendency for resources to be over-utilized. D) None of the above is correct.
If an increase in the excise tax imposed on cigarettes pushes the price per pack up by 20 percent, and the quantity sold declines by 8 percent as a result, the price elasticity of demand for cigarettes is equal to
a. -0.2. b. -0.4. c. -0.8. d. -5.
In the determination of disposable income, transfer payments are treated as if they
A. are the same as taxes. B. did not exist. C. are the opposite of taxes. D. were a constant amount.
On the aggregate expenditure graph, if autonomous investment decreases by $10 billion,
What will be an ideal response?