If the opportunity cost of 1 wristwatch is 4 wall clocks in Japan and 2 wall clocks in Germany, it makes sense for Germany to produce wristwatches.
Answer the following statement true (T) or false (F)
True
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If the MPC in an economy is 0.8, government could shift the aggregate demand curve rightward by $100 billion by
A. increasing government purchases by $25 billion. B. decreasing taxes by $25 billion. C. increasing government purchases by $80 billion. D. decreasing taxes by $100 billion.
The Bureau of Economic Analysis excludes from its calculation of GDP most of the goods produced that are not sold in markets because
A) their production has no real costs. B) their value is implicitly included in the prices of marketed goods. C) there is no satisfactory way to measure their value. D) they do not contribute to national welfare. E) this would be inappropriate for an exchange economy.
The AD curve shows that, as the price level falls the quantity of
A) GDP demanded increases. B) GDP demand decreases. C) Real GDP demanded increases. D) Real GDP demanded decreases. E) none of the above
The data for the U.S. show that investment and profits
A) have a strong negative relationship. B) are positively related during recessions, and negatively related during expansions. C) move independently. D) are positively related during expansions, and negatively related during recessions. E) none of the above