Which of the following is included in government expenditures when measuring GDP?
A. unemployment insurance payments
B. Medicare benefits for retirees
C. goods imported into the United States
D. the President's income
Answer: D
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The term capital in economic theory refers to
A) any privately owned resource. B) bonds, stocks, and similar financial assets. C) money available for lending or spending. D) produced goods used to produce future goods. E) savings out of income.
In real business cycle theory, the persistence of shocks to total factor productivity is justified by
A) the fact that some capital depreciates every period. B) the behavior of Solow residuals. C) the fact that Taylor rules have been used in post-war United States. D) the fact that capital takes some time to build.
If the demand for a good is elastic, then total revenue
a. increases as price increases b. remains constant as quantity demanded increases c. increases as price decreases d. decreases as quantity demanded increases e. decreases as price decreases
An unplanned economy operating under laissez faire
a. allocates resources by market supply and demand. b. cannot respond to basic questions about production and distribution. c. shows breakdowns with frequent surpluses and shortages. d. allocates goods and services under government subsidy.