The four components of aggregate expenditures are:
A. consumption, investment, government spending, and net exports.
B. consumption, interest payments, government spending, and net exports.
C. consumption, imports, government spending, and net exports.
D. consumer durables, investment, government spending, and net exports.
Answer: A
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If the size of the capital stock in an economy is stationary, ________.
A. gross investment is zero B. GDP is zero C. net investment is zero D. capital consumption (or depreciation) is zero
Which of the following statements best describes why we cannot be assured that bureaucrats who believe in the mission of their bureaus will always act in the public interest?
a. Logrolling among members of Congress ties the hands of the bureaucracy, preventing them from acting in the public interest. b. Bureaucrats do not personally benefit from larger budgets, but if they care about the mission of the bureau they will personally gain from acting in the public interest. c. Free riding on the work of other within the bureau will make acting in the public interest impossible. d. Self-interest is a powerful motivator, regardless of whether an individual operates in the public or private sector.
Welfare economics explains which of the following in the market for televisions?
a. The government sets the price of televisions; firms respond to the price by producing a specific level of output. b. The government sets the quantity of televisions; firms respond to the quantity by charging a specific price. c. The market equilibrium price for televisions maximizes the total welfare of television buyers and sellers. d. The market equilibrium price for televisions maximizes consumer welfare and minimizes producer profit.
In economic terminology, the accumulated training and education that workers receive to increase their productivity is referred to as
A) entrepreneurship. B) human capital. C) labor. D) physical capital.