Goodyear produces tires for automobiles, 50,000 in all. Suppose 40,000 go on new cars and are sold as part of each car, while the other 10,000 are produced as replacement tires and are sold individually. How many tires would be counted in current GDP?
a. 50,000 . because everything produced is counted
b. 40,000 because only the ones on new cars are counted
c. 10,000 because 40,000 will be counted in the value of the new cars
d. 0 because they are all intermediate goods
e. 10,000 because they are the only "final" goods and services in the total
C
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What will be an ideal response?
Division of _______ is the way a good or service that is produced is divided into a number of tasks that are performed by different workers, instead of all the tasks being done by the same person.
a. resources b. labor c. money d. tasks
Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,
a. market power is substantial. b. supply is perfectly inelastic. c. supply is more elastic at low levels of output and less elastic at high levels of output. d. supply is less elastic at low levels of output and more elastic at high levels of output.
Other things the same, an increase in the price level induces people to hold
a. less money, so they lend less, and the interest rate rises. b. less money, so they lend more, and the interest rate falls. c. more money, so they lend more, and the interest rate falls. d. more money, so they lend less, and the interest rate rises.