Which one of the following transactions would be included in GDP?
a. Ms. Kim pays $50 for a used picture frame at a neighborhood garage sale.
b. Mr. Doe donates $500 to his town's junior college scholarship fund.
c. Ms. Bartolini pays $500 to fix the front end of her car damaged in a recent accident.
d. Ms. Smith pays $5,000 to purchase 100 shares of Microsoft stock (assume no sales commission is made on the exchange).
c. Ms. Bartolini pays $500 to fix the front end of her car damaged in a recent accident.
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If there are no changes in inflation expectations, a purchase of government bonds by the Fed in the open market will cause ________
A) the federal funds rate to rise and the long-run expected real interest rate to fall B) both the federal funds rate and long-run expected real interest rate to fall C) both the federal funds rate and long-run expected real interest rate to rise D) the federal funds rate to fall and the long-run expected real interest rate to rise
If two countries have identical production possibility frontiers, then trade between them is likely to be beneficial if
A) their supply curves are identical. B) their cost functions are identical. C) their demand conditions are identical. D) their incomes are identical. E) their demand functions differ.
In the figure above, a factor that could cause the supply of bonds to shift to the right is
A) a decrease in government budget deficits. B) a decrease in expected inflation. C) a recession. D) a business cycle expansion.
With specialization in a market economy, individual:
A. Firms produce a wide range of products B. Producers consume little or none of the products they produce C. Producers consume most of the output that they produce D. Consumers have to produce most of what they consume