For the purposes of calculating GDP using the expenditure approach, which of the following payments is not included in the government expenditures component?
A. The wages paid by a state government to the workers in its welfare department
B. The wages paid by a local government to its road crew
C. The federal government's purchase of a submarine from a shipbuilder
D. Social Security payments
Answer: D
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Professor's economics students are constructing models for how gasoline prices change. Maria's model has very realistic assumptions and is quite complex. Anna's model is less complicated and less realistic
Maria's model correctly predicts gas price increases 5% of the time. Anna's model predicts correctly 15% of the time. On the basis of usefulness or "goodness," Professor will give which student's model the higher grade and why? A) Maria's model gets the higher grade because it is more complex. B) Anna's model gets the higher grade because it is simpler. C) Maria's model gets the higher grade because it is more realistic. D) Anna's model gets the higher grade because it predicts accurately more often.
Which of the following is not an argument made by those who oppose reforming the tax laws to encourage saving?
a. A public budget surplus can raise national saving. b. The substitution effect of a higher return to saving may be about equal to the income effect of a higher return to saving. c. Low-income households save a larger fraction of their income than high-income households. d. Tax cuts might cause a budget deficit.
In a consumption schedule, the change in consumption is a constant $12 billion and the change in income is a constant $16 billion across each consumption and income level. It can be concluded that the:
a. Slope of the saving schedule is .33 b. Marginal propensity to save is .25 c. Slope of the consumption schedule is .67 d. Marginal propensity to consume is 1.33
Among the most important demand side factors explaining homes prices would be the size of the
A. homebuyer's car. B. metropolitan area and home itself. C. home. D. metropolitan area.