Mikey likes bagels, so he buys an old pizza shop for $150,000 and spends $10,000 installing new equipment which will allow him to make bagels instead of pizza. How will Mikey's recent purchases affect GDP?
A. Investment will increase $160,000.
B. Investment will increase $150,000, and consumption will increase $10,000.
C. Consumption will increase $150,000, and investment will increase $10,000.
D. Investment will increase $10,000.
D. Investment will increase $10,000.
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The welfare costs of rent seeking will approximate _____
a. the value of the resources expended in lobbying b. the deadweight loss of taxation c. the value of the rent-seeking benefits d. zero if political markets are perfectly competitive
The marginal propensity to consume is
A. disposable income divided by consumption. B. the change in consumption divided by the change in disposable income. C. consumption divided by disposable income. D. the change in disposable income divided by the change in consumption.
Which of the following would decrease the supply of airline travel?
A. Reduced number of airline travelers. B. New airline companies beginning operations. C. Higher fuel costs. D. Lower prices for airline tickets.
The MRP of labor will shift to the left if
A. wages decrease. B. labor productivity decreases. C. labor productivity increases. D. wages increase.