Suppose Ford Motor Company produced and sold $50 million 2015 model-year pickup trucks during the last half of 2014. How would this affect GPD?
A) 2014 GDP would remain unchanged, and 2015 GDP would rise by $50 million.
B) 2014 GDP would rise by $50 million, and 2015 GDP would not be affected.
C) Both 2014 and 2015 GDP would rise by $25 million.
D) Trick question: 2015 model-year vehicles can't be produced and sold in 2014.
B
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In perfect competition, the marginal revenue of an individual firm
A) is zero. B) is positive but less than the price of the product. C) equals the price of the product. D) exceeds the price of the product.
The issue of bonds in corporate financing
A. is cheaper than stocks in the long run to the issuer. B. is riskier than stocks to the issuer. C. commits the issuer to make fixed annual payments even if profits are negative. D. All of these responses are correct.
Suppose that nondurable goods spending is $200 billion, durable goods spending is $400 billion, new residential housing spending is $500 billion, and spending on services is $700 billion. What does consumption equal?
A) $600 billion B) $1,100 billion C) $1,800 billion D) $1,300 billion E) There is not enough information to answer this question.
If Tucker National Bank has $10,000 in excess reserves that it cannot lend:
A. the money multiplier increases. B. the money multiplier decreases. C. the money multiplier stays the same. D. checkable deposits increase.