The largest component of GDP in the expenditure approach is
A) personal consumption expenditures.
B) gross private domestic investment.
C) government expenditure on goods and services.
D) net exports.
A
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An unexpected rise in Capacity Utilization should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
Why does the price level in a perfectly competitive market move toward the zero-profit point?
a. Because firms enter and exit the market in response to gains and losses b. Because short-run losses reverse the effects of long-run gains c. Because profitable firms increase short-run productivity d. Because firms operate below the average cost curve
Explain why returns on assets compensate for systematic risk but not for idiosyncratic risk.
What will be an ideal response?
Which of the following is a transfer payment?
a) the wages paid to a civil servant b) the government’s payment to a contractor building a bridge c) an interest payment on the national debt d) a Social Security check sent to a retiree e) the purchase of a subway token