Gross domestic product understates the total production of final goods and services because of the omission of
A) exports.
B) inflation.
C) intermediate goods.
D) household production.
Answer: D
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In a competitive market the demand curve shows the ________ received by consumers and the supply curve shows the ________
A) economic surplus; opportunity cost B) utility; average cost. C) marginal benefit; marginal cost D) net benefit; net cost
If the ________ curve is relatively more unstable than the ________ curve, an interest rate target is preferred
A) IS; IS B) IS; LM C) LM; IS D) LM; LM
If the current margin is greater than the desired margin, the firm should
a. Increase production b. Decrease production c. Not change production level d. Production ceases
If planned aggregate expenditure (PAE ) in an economy equals 2,000 + 0.8Y and potential output (Y*) equals 11,000, then this economy has:
A. no autonomous expenditure. B. a recessionary gap. C. no output gap. D. an expansionary gap.