Which of the following correctly describes a final good?
i. A final good is bought by its final consumer.
ii. A final good can be used by a firm as a component of another good or service.
iii. Investment goods cannot be a final good.
A) i only
B) i and ii
C) i, ii and iii
D) i and iii
E) ii and iii
A
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If private savings equals $1.2 billion and private investment equals $1.5 billion, then there is a
A) current account balance. B) government sector deficit. C) private sector deficit. D) private sector surplus. E) government sector surplus.
According to the Ricardian equivalence theorem, budget deficits resulting from tax cuts
A) increase aggregate demand. B) decrease aggregate demand. C) have no effect on aggregate demand. D) affect only aggregate supply.
Compared to IACs, LDCs are often characterized by:
a. lower life expectancy. b. lower adult literacy. c. lower per capita energy consumption. d. All of these.
Which of the following is not correct?
a. In a labor market, the wage adjusts to balance the supply and demand for labor. b. A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor. c. Any event that changes the supply or demand for labor must change the equilibrium wage. d. Any event that changes the supply or demand for labor must change the value of the marginal product.