Since it is counted as investment, why doesn't the purchase of earthmoving equipment from China by a U.S. corporation increase U.S. GDP?
The purchase of foreign equipment is counted as investment, but GDP measures only the value of production within the geographic borders of the United States. In order to avoid including the value of the imported equipment, imports are subtracted from GDP. Hence, the value of the equipment in investment is canceled by subtracting its value as an import.
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"Gasoline purchases were up 10% last week, even though gasoline prices were 6 cents higher than the week before! You see, the law of demand does not hold for gasoline!" What is being misunderstood in the above statement?
A) Nothing at all. B) It implies the demand curve for gasoline is vertical. C) It fails to recognize that the demand curve has shifted to the right. D) It fails to hold constant all the other factors that influence demand.
Combating the "greenhouse effect" has classic free-rider problems
a. True b. False Indicate whether the statement is true or false
In the long run, the primary effect of rapid monetary growth is
a. lower nominal interest rates. b. reduced unemployment. c. inflation. d. an increase in real output.
Does the movement of workers from other countries to the U.S. affect the demand for labor in the U.S., or does it affect the supply of labor in the U.S.?