The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross private domestic investment ($640). What is GDP in this economy?
a. $6,633 billion
b. $6,463 billion
c. $6,500 billion
d. $6,537 billion
Answer: b. $6,463 billion
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Which of the following could help explain why professional football players have high salaries?
a. There is little social status attached to the occupation. b. Their marginal revenue products are typically very low. c. They face a high chance of having their careers cut short. d. Many college football players want to become professional football players. e. The labor market is perfectly competitive due to the players' union.
Which of the following is the best definition of money?
a. Anything generally accepted as payment for goods or repayment of debt b. Anything that can be converted to a liquid asset c. A national currency that is backed by gold or other precious metals d. Paper or coin currency that is produced by the Federal Reserve
Suppose that a perfectly competitive industry is in long-run equilibrium. The price of a complement good decreases. What will happen?
A. Next period a typical firm will earn positive economic profit. B. Next period a typical firm will increase output. C. Eventually firms will exit the industry. D. both a and b E. all of the above will happen
When the marginal cost is higher than the average total cost,
A. the average fixed cost must exceed the average variable cost. B. the average variable cost must also be higher than the average total cost. C. the higher additional value causes the average to rise. D. the higher additional value causes the average to fall.