Suppose GDP is $16 trillion, with $10 trillion coming from consumption, $2 trillion coming from gross investment, $3.5 trillion coming from government expenditures, and $500 billion coming from net exports. Also suppose that across the whole economy, depreciation (consumption of fixed capital) totals $1 trillion. From these figures, we see that net domestic product equals:
a. $17.0 trillion.
b. $16.0 trillion.
c. $15.5 trillion.
d. None of the above
Answer: d. None of the above
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The wide acceptance of fiat money is determined by: a. people's belief that it is worth something
b. the amount of precious metal that the government holds to back the money. c. the money's market value as a commodity. d. the rate of interest, which is the price paid to borrow money. e. its ability to function as a unit of account.
Use the following graph for a profit-maximizing pure monopoly to answer the next question.
The firm will set its price at
A. 0G. B. 0K. C. 0H. D. 0J.
If the quantity of bread demanded rises 2 percent when the price of bread declines 10 percent, then the price elasticity of demand is:
A. 0.2. B. 2. C. 5. D. 10.
Deviations of the actual unemployment rate from the natural rate of unemployment are called
A. seasonal unemployment. B. frictional unemployment. C. underemployment. D. cyclical unemployment.