Which approach to calculating GDP is computed using compensation of employees, rental income, profits, net interest, indirect business taxes, and depreciation?
a. The expenditure approach.
b. The income approach.
c. The product-market approach.
d. The circular-flow approach.
b
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If the local airport decides to pay monetary compensation to the people on whom the airport's operation has imposed costs, it should compensate the people who
A) currently live nearby. B) currently live nearby and are also tenants. C) currently live nearby and also own the residences in which they live. D) owned nearby residences when the airport was built. E) owned nearby residences when the airport was built and who have not been able to sell their residences since the construction of the airport.
If a country produces only two goods, then it is not possible to have an absolute advantage in the production of both goods
Indicate whether the statement is true or false
Fixed costs can be defined as costs that
a. vary inversely with production. b. vary in proportion with production. c. are incurred only when production is large enough. d. are incurred even if nothing is produced.
Which of the following is a drawback of a floating exchange-rate system?
A. Adverse foreign trade shocks are especially damaging since any intervention by the central bank adds to the recession. B. Overshooting of exchange rates may cause excessive resource shifts into and out of trade-oriented industries. C. Inflation is fully transmitted from one country having a higher rate of inflation to another one having a lower rate. D. Monetary policy is ineffective in raising aggregate demand since it cannot be directed toward achieving internal balance.