General Motors Corporation (a U.S.-based firm) produces a Saab vehicle in Sweden, and sells it in the United States. In which country's GDP is it included?
a. Sweden and the United States
b. The United States because it was sold there
c. The United States because GM is a U.S. company
d. Sweden because it was produced there
D
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When the Federal Reserve ________
A) drains liquidity, the federal funds rate falls B) drains liquidity, real interest rates fall C) provides more liquidity, the federal funds rate falls D) all of the above E) none of the above
In the short run, the fixed costs of a firm:
A. must be paid regardless of level of output. B. should be strongly considered in deciding whether to shut down production. C. are zero when quantity produced is zero. D. must be higher than variable costs for the firm.
Moral Hazard describes a situation in which
a. buyers or sellers react to market signals by altering their behavior in ways that generate adverse market outcomes b. an action by an individual that endangers others c. an activity destroys all market outcomes d. rational behavior is removed from market decision making e. irrational behavior creates perverse market outcomes
A change in interest rates would shift the consumption schedule and the saving schedule ______; a change in taxes would shift these two schedules ______.
A. In the same direction; also in the same direction B. In the same direction; in opposite directions C. In opposite directions; also in opposite directions D. In opposite directions; in the same direction