Which of the following most clearly illustrates the concept of derived demand?
A. An increase in the price of steak causes the demand for poultry to increase.
B. An increase in the demand for new houses leads to an increase in the demand for construction workers.
C. An increase in consumer income leads to an increase in the demand for services provided by the government.
D. An increase in the demand for new cars causes the demand for used automobiles to rise.
Answer: B
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For developed countries like the United States, GDP will always exceed GNP
Indicate whether the statement is true or false
When the nominal exchange rate falls
A) the domestic currency buys more units of foreign currency and the domestic currency has depreciated. B) the domestic currency buys fewer units of foreign currency and the domestic currency has depreciated. C) the domestic currency buys more units of foreign currency and the domestic currency has appreciated. D) the domestic currency buys fewer units of foreign currency and the domestic currency has appreciated.
In the 1960s and 1970s the U.S. passed several major consumer safety laws, including the Flammable Fabrics Act and the Child Protection Act. The economic impact of such legislation may include all of the following except:
a. reducing the price of the regulated product. b. increasing the cost of producing the regulated product. c. reducing the supply of the regulated product. d. reducing competition within the regulated industry.
Gross domestic product (measured in real dollars) is an important social tool because it provides
a. observers with a reasonably good index of social progress. b. policy makers with a measure of the nation's total wealth. c. policy makers with information about the economy's current rate of output and the direction of recent changes. d. economists with a reasonably good measure of income inequality.