Which adjustment(s) must be made to convert net domestic product to GDP?
i. add indirect taxes
ii. subtract subsidies
iii. add depreciation
A) i, ii and iii B) i and ii C) iii only D) i and iii only E) ii only
A
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If the demand for product X is inelastic, a 4% increase in the price of X will ________ the quantity demanded of X by ________ than 4%.
A. decrease; less B. increase; less C. decrease; more D. increase; more
To solve the principle agency problem, which of the following questions should you ask a. Who is making the bad decision?
b. Does the decision maker have all the relevant information? c. Does the decision maker have the incentive to make the right decision? d. All of the above
People are likely to respond to a policy change
a. only if they think the policy is a good one. b. only if the policy change changes the costs of their behavior. c. only if the policy change changes the benefits of their behavior. d. if the policy changes either the costs or benefits of their behavior.
At the equilibrium real interest rate in the open-economy macroeconomic model, the amount that people want to save equals the desired quantity of
a. net capital outflow. b. domestic investment. c. net capital outflow plus domestic investment. d. foreign currency supplied.