Inventory changes (that is, goods produced but not sold) are important in calculating GDP because
a. they are the least volatile component of investment
b. these changes mean the economy has extra goods available for purchase
c. they are an example of transfer payments
d. GDP includes all possible sources for goods and services
e. we want to measure all current production when computing GDP
E
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Assume that the Fed increases the money supply when there is substantial unemployment in the economy. According to the quantity theory of money, if velocity is constant, then:
a. the price level will decrease. b. real GDP will decrease. c. nominal GDP will increase. d. nominal GDP will decrease. e. real GDP will remain constant while price level will decrease.
Which of these events would indicate a movement along a supply curve for batteries?
a) Workers at a major battery factory go on strike and stop production b) A new law requires battery manufacturers to spend more money on environmentally-sound trash disposal c) Battery manufacturers raise the price of eight AA batteries from $3.50 to $3.95 a set. d) A new trade agreement enables stores to import foreign batteries
As a result of changes in cyclical unemployment, the unemployment rate ________ from 2009 to 2014.
A. remained above 6 percent B. rose every year C. fell every year D. remained below 6 percent
What are the marginal propensity to consume (MPC) and marginal propensity to save (MPS)? How are the two concepts related? How are the two concepts related to the consumption and saving functions?
What will be an ideal response?