An example of "investment" in the national income accounts is the purchase of
A) a new van by a potter, who packs it with his wares and travels to art shows.
B) 100 shares of Intel stock on the New York Stock Exchange.
C) a 100-year-old house that was just put on the protected historic sites list in the year in question.
D) a U.S. government bond.
A
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Mr. Smith earned a salary of $5,000 in in 1980 while his son earned a salary of $8,000 in 2010. If the price index for 1980 was 100 and that for 2010 was 198, whose salary was worth more? Explain your answer
What will be an ideal response?
Part of the effect of higher interest rates on residential construction is through
A) inflationary expectations. B) credit rationing. C) the expected value of the homes to the buyers. D) the income effect.
Concentration ratios measure the:
A. geographic location of the largest corporations in each industry. B. degree to which product price exceeds marginal cost in various industries. C. percentage of total industry sales accounted for by the largest firms in the industry. D. number of firms in an industry.
Refer to the above figure. All of the following are true concerning the diamond-water paradox EXCEPT
A. marginal utility of diamond consumption is relatively high. B. since the price of diamonds is high, demand is great. C. the demand for water exceeds the demand for diamonds. D. the price of diamonds exceeds the price of water.