Which of the following is included in the consumption component of GDP?
a. household purchases of appliances.
b. household purchases of medical care.
c. household purchases of food.
d. All of the above are included in the consumption component of GDP.
d
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An industrially advanced country (IAC) is defined as a country with a GDP per capita among the top ____ countries in the world
a. 5 b. 10 c. 20 d. 27
Recall the Application about the possible link between interest rates and commodity prices worldwide to answer the following question(s).According to this Application, which is a theoretical explanation for why commodity prices rise with expansionary monetary policy?
A. Lower interest rates raise bond prices, so investors invest less in bonds and more in commodities. B. Higher interest rates raise bond prices, so investors invest less in bonds and more in commodities. C. Lower interest rates raise bond prices, so investors invest more in bonds and more in commodities. D. Lower interest rates lower bond prices, so investors invest less in bonds and more in commodities.
Assume that investment does not depend on the interest rate. A reduction in government spending will cause which of the following for this economy?
A) no change in the interest rate B) no change in output C) no change in investment D) an increase in investment E) none of the above
The figure above shows the market for fast food restaurant employees in a college town in a small nation to the East. The local Taco Bell pays its workers $12 an hour. This wage rate is
A) designed reduce the unemployment rate. B) an effort to increase the demand for labor. C) illegal because the equilibrium wage rate is $6 an hour. D) an efficiency wage aimed at reducing employee turnover. E) the actual equilibrium wage rate.