In the first half of 2011, automobile sales in the United States were lower than they were in the first half of 2010
The decrease in auto sales impacts GDP because new automobiles are counted as ________ when purchased by households and ________ when purchased by businesses.
A) consumption; investment B) investment; consumption
C) durable goods; nondurable goods D) nondurable goods; durable goods
A
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Which of the following events will decrease the domestic real interest rate in an open economy?
A. A decrease in the domestic saving. B. An increase in the perceived riskiness of investing in the domestic economy. C. An increase in domestic saving. D. An decrease in net capital inflow.
The time lags, which must be either reduced or known with some precision if fiscal policy is to be an effective stabilizing technique, are the lags between
A) the beginning of a cyclical movement and its recognition. B) the decision that compensatory action should be taken and the enactment of tax or expenditure changes. C) the increase or decrease in net government receipts and their final effects on total spending. D) all of the above, because a significant miscalculation with respect to any of these lags could increase aggregate instability.
Using the data in the above table, when output increases from 4 to 9 units, the marginal cost of one of those 5 units is
A) $4.00. B) $4.25. C) $5.00. D) $6.25.
Because leisure is a normal good, an increase in the wage rate will result in
A) an increase in the quantity of labor supplied because of the substitution effect. At low wages the income effect causes an increase in the quantity of labor supplied, but at high wages the income effect causes a decrease in the quantity of labor supplied as the wage rises. B) an increase in the quantity of labor supplied because of both the substitution effect and the income effect. C) a decrease in the quantity of labor supplied because of the substitution effect and an increase in the quantity of labor supplied because of the income effect. D) an increase in the quantity of labor supplied because of the substitution effect and a decrease in the quantity of labor supplied because of the income effect.