For an economy that engages in international trade, GDP is divided into four components. Which of the following items is not one of those components?
a. consumption.
b. national saving.
c. government purchases.
d. net exports.
b
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What are the two parts of the economic problem? a. economics explains many things, but only things that are related directly to money
b. natural resources are scarce but human-made resources are not. c. scarcity forces us to choose and choices are costly because we must give up other opportunities that we value. d. we have unlimited wants and unlimited resources.
Which of the statements best describes why the aggregate demand curve is downward sloping?
a. As the aggregate price level increases, consumer expectations about the future change. b. As the aggregate price level decreases, the stock of existing physical capital increases. c. An increase in the aggregate price level causes consumer and investment spending to fall, because consumer purchasing power decreases and money demand increases. e. As a good's price increases, holding all else constant, the good's quantity demanded decreases.
People behave rationally when they
A) follow the advice of government leaders. B) never have regrets about their decisions. C) make decisions they think will make themselves better off. D) make decisions with a focus only on financial outcomes.
Suppose the required reserve ratio is 10 percent, and the Fed buys $5 million worth of bonds from the public. If the public deposits this amount into transactions accounts, the money supply will
A. Not be affected directly, but an additional lending capacity of $50 million will be created for the banking system. B. Increase directly by $5 million in reserve deposits, with an additional lending capacity of $40 million created for the banking system. C. Increase directly by $5 million in reserve deposits, with an additional lending capacity of $45 million created for the banking system. D. None of the choices are correct.