National income equals
A. net national product minus taxes on production and imports and employer contributions to Social Security.
B. net national product minus statistical discrepancy.
C. gross national product minus depreciation.
D. GNP minus depreciation and taxes on production and imports.
Answer: B
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Oligopolies are difficult to analyze because
A) oligopolies are a recent development so economists have not had time to develop models. B) demand and cost curves do not exist for these types of industries. C) the firms are so large. D) how firms respond to a price change by a rival is uncertain.
Which function of money allows consumers who are searching for a new car to compare the costs of different optional features of different cars in order to determine if they want the features or not?
a) Medium of exchange b) Unit of account c) Store of value d) Barter
As inflation increases, for any fixed nominal interest rate, the real interest rate:
A. decreases. B. decreases by less than the increase in inflation. C. remains the same, that's why it is real. D. also increases.
Suppose equilibrium real GDP is currently at $800 billion and investment is $100 billion. If an increase in the interest rate reduces investment from $100 billion to $75 billion, and the MPC is 0.8, the new level of equilibrium real GDP will be:
A. $500 billion. B. $600 billion. C. $675 billion. D. $775 billion.