Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What's the total contribution to GDP each time Tim mows a yard?
a. $1
b. $19
c. $20
d. $21
c
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In a closed economy, aggregate demand is the sum of
A) consumer expenditure, actual investment spending, and government spending. B) consumer expenditure, planned investment spending, and government spending. C) consumer expenditure, actual investment spending, government spending, and net exports. D) consumer expenditure, planned investment spending, government spending, and net exports.
Suppose a shortage for good X exists. Given this information, we know that
A) the price of good X will tend to rise toward the equilibrium level. B) the price of good X will tend to fall toward the equilibrium level. C) a government price floor should be imposed above the current price so that the market can work more effectively. D) a government price ceiling should be imposed above the current price so that the market can work more effectively.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency remains the same. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Refer to the above table. How long would it take for a country to triple its GDP if the GDP grew at a 20 percent rate?
A. 2 years B. 10 years C. 4 years D. 6 years