Real business cycle theory explains the business cycle as the result of
a. unstable investment demand.
b. excess growth of the quantity of money.
C. shocks to consumer spending habits
d. fluctuations in productivity.
Ans: d. fluctuations in productivity.
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The value of used goods ________ counted as part of GDP ________
A) are; as long as they are classified as consumption goods B) are; as long as they are classified as investment goods C) are not; because they were counted during the period when they were counted as new goods D) are not; because most fall in value and would cause a decrease in the value of GDP E) may be; as long as their value has risen
Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and
imports of goods and services from foreigners is $1.5 million. Calculate this nation's GDP.
An outward shift of a nation's production possibilities frontier can occur due to
A) a natural disaster like a hurricane or bad earthquake. B) a change in the amounts of one good desired. C) an increase in the labor force. D) a reduction in unemployment.
When a good has many close substitutes available, it is likely to be:
A. less price elastic than are goods without close substitutes available. B. more price elastic than are goods with many complement goods available. C. less price elastic than are goods with many complement goods available. D. more price elastic than are goods without close substitutes available.