Neither intermediate goods nor used goods are included in GDP. Explain why these expenditures are not included in GDP
What will be an ideal response?
Intermediate goods and used goods are not included in the measurement of GDP because they do not represent final expenditures on goods and services produced within the relevant time period. Intermediate goods are inputs used in the production of final goods and services. To count them twice would be double counting and inflate the level of GDP. Used goods already have been counted in GDP during the year in which they were produced. They were not produced in the current time period and therefore are not included in GDP.
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During World War II the United States' economy grew by about ________ percent a year.
A. 5 B. 10 C. 15 D. 20
An increase in price causes exit from a constant-cost industry.
Answer the following statement true (T) or false (F)
A monopoly misallocates resources when it
A. restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good. B. exploits scale economies. C. makes an above-normal profit. D. sells the same product to different groups of customers at different prices.
Refer to the information provided in Figure 4.1 below to answer the question(s) that follow.
Figure 4.1Refer to Figure 4.1. Assume that initially there is free trade. The price of apples in the United States will increase to 40 cents per apple if a ________ per apple tax tax is imposed.
A. 10 cents B. 20 cents C. 30 cents D. 40 cents