Which of the following will be included in the calculation of gross domestic product using the expenditure method?
A) Wages paid to labor by firms B) Interest paid by households for loans
C) Services purchased by the government D) Dividends paid by firms to shareholders
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
In general, a fine on buying a product leads to the
A) supply curve shifting rightward. B) supply curve shifting leftward. C) demand curve shifting rightward. D) demand curve shifting leftward.
Automobiles and many other products are differentiated. As a result,
A) we see countries specializing completely in the production of automobiles. B) consumers of automobiles have difficulty deciding what type of imported automobile to buy. C) different countries may each have a comparative advantage in producing different types of automobiles. D) the quality of imported automobiles is less than it could be.
The cost of production on the “bottom forty” is $100,000 for a given size crop. On the “north forty,” due to erosion of the soil, the cost is $150,000. If both are being farmed by tenants, we would expect the rent on the “bottom forty” to be
A. $50,000 below the rent on the north forty. B. $50,000 above the rent on the north forty. C. different from that on the north forty by an indeterminable amount. D. $50,000, and the rent on the north forty is $50,000.