Which components of aggregate expenditure are influenced by real GDP?
What will be an ideal response?
Consumption expenditure and imports are influenced by real GDP. Both increase when real GDP increases.
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GDP does not directly include intermediate goods because
A) intermediate goods are not valuable. B) intermediate goods are not useful to consumers. C) that would count the intermediate goods twice. D) that would understate the true size of GDP.
Look at today's Wall Street Journal. What is the leading economic news story? With which of the big economic questions does it deal and what tradeoffs does it discuss or imply?
What will be an ideal response?
Why does a patent stimulate research?
A) Patents give firms time to do research. B) Patents give firms the opportunity to recover research costs and thus serve as a profit motive. C) Without patents firms would not research as much. D) They don't.
A balance-of-payments surplus can be reduced with
A. Increased tariffs and quotas on foreign goods. B. Increased government spending. C. Increased taxes. D. Contractionary monetary policy.