The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross private domestic investment ($640). What is GDP in this economy?
a. $6,633 billion
b. $6,463 billion
c. $6,500 billion
d. $6,537 billion
b. $6,463 billion
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When a good suddenly becomes more scarce in a free market, caused by a significant increase in consumer demand, then
A) it is a clear sign that households have become more greedy. B) the price will tend to rise rapidly in light of the greater scarcity. C) suppliers will gain in the exchange and buyers will lose. D) the law of demand will be contradicted because people will be buying more, not less, at a higher price. E) all of the above are true.
Which of the following does not hold true for a perfectly competitive firm in long-run equilibrium?
A) Marginal cost will be minimized. B) It will minimize average total cost. C) Its economic profit will be zero. D) It will charge a price equal to marginal cost.
Which word best completes the following sentence? A rational decisionmaker always chooses the option for which marginal benefit is ________ marginal cost
a. equal to b. less than c. more than d. unrelated to
The GDP Deflator is different than the CPI in that
A. the GDP deflator uses last year's prices and the present year's production, whereas the CPI uses present prices. B. the GDP deflator doesn't include food and energy prices. C. the CPI is chain-based. D. the CPI includes things businesses buy, while the GDP deflator does not.