Changes in inventories are included as part of investment spending because anything produced by a business that has
What will be an ideal response?
not been sold during the accounting period is something in which the business has invested. correct
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An overvalued fixed exchange rate can be maintained only as long as:
A) the country's central bank reserves are available to support currency intervention in the foreign exchange market. B) the country's central bank can increase the domestic money supply. C) the country's government increases debt financing. D) none of the above.
Which of the following statements is false? An economic analysis of carbon taxes can:
A) calculate the increase in costs faced by coal-using industries. B) predict the effect on unemployment in West Virginia coal mining communities. C) compare the likely reductions in medical expenditures on diseases caused by smog. D) present a trade-off of the costs and benefits of different levels of carbon taxes. E) conclude that such taxes should be imposed to benefit future generations.
The perpetual state of insufficiency of resources to satisfy people's unlimited wants is:
a. apparent only in poor countries. b. completely unrealistic. c. present in modern economies, but not in the past. d. the definition of scarcity.
For a normal good, quantity demanded
a. increases as income rises, so the income elasticity of demand is positive b. increases as income rises, so the income elasticity of demand is negative c. falls as income rises, so the income elasticity of demand is positive d. falls as income rises, so the income elasticity of demand is negative e. remains unchanged as income rises, so the income elasticity of demand is zero