GDP is used in an attempt to
A) calculate the profitability of a country.
B) measure the economic performance of a country.
C) determine the overall well-being of a country.
D) figure out the prices of all goods and services exchanged in the legal economy.
E) guide entrepreneurs toward more profitable investment decisions.
B
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Suppose your tastes are defined by the utility function 
.
a. Suppose your income is $1,000, the price of 
is 1 and the price of 
style="vertical-align: -7px;" width="15px" height="20px" align="absmiddle" /> is 
. Set up your utility maximization problem.
b. Derive the quantity of 
you will consume.
c. What happens to your consumption of 
if 
increases?
d. Now suppose that your and my tastes are captured by the utility function 
, with the parameter 
different for you than it is for me. When 
increases, you consume more 
than before and I consume less. What range of 
is consistent with your behavior, and what range is consistent with mine? Use your answer to (b) to explain.
What will be an ideal response?
High-powered money minus reserves equals
A) reserves. B) currency in circulation. C) the monetary base. D) the nonborrowed base.
In the federal funds market diagram, a decrease in the required reserve ratio
A) shifts the demand curve for reserves to the left. B) increases the federal funds rate. C) results in a multiple expansion of deposits, which increases the equilibrium level of reserves held by banks. D) shifts the supply curve for reserves to the right.
Which of the following are considered factors of production? I. Land II. Labor III. Physical capital IV. Entrepreneurship
A) I and II only B) I and III only C) I, II and III only D) I, II, III and IV