The farmer pays $0.2 for the seed that is sold to the miller for $0.45; the miller makes flour and sells it to the baker for $0.55. The baker makes bread and sells it to the grocery store for $1.00 and the store sells it to consumers for $1.25. Gross Domestic Product (GDP) is
A. $2.20.
B. $1.25.
C. $2.00.
D. $1.00.
Answer: B
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In economies with effective accounting standards and low-cost, reliable information, ________
A) banks become less dominant among intermediaries B) the tyranny of collateral is particularly intense C) funds are available only for activities involving little or no risk D) restrictive covenants are difficult to enforce
The initial impact of ________ the money supply ________ the balance of payments.
A. contracting; has no effect on B. expanding; improves C. contracting; worsens D. expanding; worsens
In economic utility analysis, consumer tastes and preferences are assumed
A) to be determined by income. B) to be influenced by the prices of goods. C) given and stable for an individual. D) given but rapidly changeable.
When a good is illegal, the supply curve is likely to be inelastic because
A. the difficulty of expanding operations as price rises because of the increased likelihood of capture. B. extra costs associated with avoiding capture. C. the ease of finding new buyers without getting caught. D. the ease with which sellers can expand operations into new territory when price rises.