Firms in a small economy planned that inventories would grow over the past year by $300,000. Over that year, inventories actually grew by $400,000. This implies that
A) aggregate expenditure that year was less than GDP that year.
B) aggregate expenditure that year was equal to GDP that year.
C) there was a planned decrease in inventories that year.
D) there was an unplanned decrease in inventories that year.
A
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The Spa DuJour Salon faces a downward-sloping demand curve for haircuts and hires stylists in a competitive labor market. How will each of the following affect the short-run demand for stylists at Armadillo?
(i) A new competitor, the Jake the Barber, opens for business directly across the street from Spa DuJour. (ii) The cost of Spa DuJour's annual licensing fee increases from $50 to $200; fortunately the increase is not large enough to drive Spa DuJour out of business. (iii) Spa DuJour expands its facilities to include two new styling bays.
A vertical demand curve for a particular good implies that consumers are
A) sensitive to changes in the price of that good. B) not sensitive to changes in the price of that good. C) irrational. D) not interested in that good.
Two economists from Ohio University estimated that the demand curve for kerosene in Indonesia was such that a 10 percent increase in the price reduced the quantity demanded by 2.2 percent and that a 10 percent increase in the price of electricity increased the demand for kerosene by 1.6 percent. This indicates that (i) the demand for kerosene is price inelastic and (ii) kerosene and electricity
are substitutes. Which of these two statements is correct? a. i and ii b. i not ii c. ii not i d. neither i nor ii
The city of Ann Arbor Michigan buys a police car manufactured in Germany. In the GDP accounts this transaction is included in
a. in government expenditures and exports.
b. government expenditures and imports.
c. exports, but not government expenditures.
d. imports, but not government expenditures.