The production of a wireless earbud involves 5 stages. The value added after the first stage of production occurs is $1.20. The sale price of the wireless earbud is $2.50. Based on the above information, what amount is used to measure GDP?
A. $3.70
B. $1.30
C. $2.50
D. $1.20
Answer: C
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The period between a business cycle peak and the subsequent trough is called
a. a recession. b. a complete cycle. c. an expansion. d. a change in economic trend.
Which of the following statements is true?
a. Sales, excise, and flat-rate taxes violate the ability-to-pay principle of taxation fairness because each results in a greater burden on the poor than the rich. b. Government failure may occur if voters are rationally ignorant. c. Government failure may occur because of special-interest group political pressure. d. All of these.
An example of splitting up the value chain would be the shipment of
a. refrigerators. b. cellular Phones. c. automotive dashboards. d. automobiles.
Policies designed to pay off the national debt will result in:
A. A smaller level of aggregate demand B. Inflation. C. A higher level of aggregate demand. D. A redistribution of income but not wealth.