Which of the following would not be included in the government consumption expenditures and gross investment (G) category of GDP?
a. The payments made to Social Security recipients.
b. The expenditures made to repair a highway.
c. The spending for professors at state universities.
d. The purchase of new china for White House functions.
a
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Which of the following is a TRUE statement relative to retained earnings and investment?
A) Lower interest rates stimulate borrowing for investment, but discourage the use of retained earnings for investment. B) Lower interest rates reduce the opportunity cost of retained earnings, stimulating the use of these funds in investment. C) Lower interest rates stimulate borrowing for investment, but have no effect on the use of retained earnings for investment spending. D) Lower interest rates have no effect on investment spending at all because investment spending is autonomous.
When the demand for a good is perfectly elastic, ________
A) total revenue is as large as possible B) the demand curve for the good is vertical C) the price elasticity of demand is infinite D) the price elasticity of demand is zero
Where a firm generates beneficial externalities, society would be better off if
A. the firm produced a larger output level. B. the firm reduced its output level. C. a tax was levied on the firm equal to the dollar amount of the externalities. D. price was reduced below marginal private cost.
When calculating price elasticity of demand, if the percentage change in price is negative, then the percentage change in quantity demanded is typically:
A. negative. B. less than one. C. positive. D. greater than one.