GDP counts:
A. only final goods and services, because otherwise certain things would be double-counted and the GDP would be overestimated.
B. only intermediate goods and services, because those are easier to track.
C. both intermediate and final goods and services because it is important to capture all values, regardless of which market they take place in.
D. all values that are reported to the government.
A. only final goods and services, because otherwise certain things would be double-counted and the GDP would be overestimated.
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If the government increases taxes while holding expenditures constant,
A) the bond supply curve will shift to the left and the equilibrium interest rate will fall. B) the bond supply curve will shift to the right and the real interest rate will fall. C) government borrowing will be increased. D) the government's deficit will increase.
When conducting open market operations, at what price is it willing to buy or sell securities?
A) at the price agreed upon by the Federal Open Market Committee B) at the price agreed upon by the Board of Governors C) at the price set by the Fed chair D) at whatever price is necessary to carry out its open market operations
World output will be maximized if each country
a. attempts to be self-sufficient b. specializes in producing those goods in which it has a comparative advantage c. specializes in producing those goods in which it has an absolute advantage d. reduces its consumption possibilities e. specializes in producing those goods for which it has the lowest demand
Interest rate parity can be summarized by which of the following equilibrium conditions?
a. The foreign interest rate must equal the domestic interest rate plus the expected inflation. b. The foreign interest rate must equal the domestic interest rate. c. The foreign interest rate must equal the expected change in the exchange rate. d. The domestic interest rate must equal the foreign interest rate plus the expected change in exchange rate. e. The domestic interest rate must equal the foreign interest rate minus any expected inflation.