Investment, as a part of GDP, includes:
A. any goods that are bought by - firms who plan to use those purchases to produce other goods and services in the future, rather than consuming them.
B. any item you buy that you are looking for a return on over time.
C. consumption goods that are purchased by households.
D. spending on productive inputs such as stocks, bonds, and other types of financial instruments.
Answer: A
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If a good is produced up to the point where marginal social benefit equals marginal social cost, then:
a. social welfare is maximized. b. the good is overproduced and the market is inefficient. c. firms are earning zero profits. d. all externalities have been eliminated.
In the United States, when the outflow of dollars to pay for our imports of goods from Japan exceeds the inflow of dollars earned by our exports to Japan, typically
a. the dollar appreciates b. the United States can buy back some of its assets that are held by the Japanese c. this is merely a statistical discrepancy because the trade with Japan (exports and imports) must net out to zero d. the United States can use its reserves of yen to cover the difference e. the Japanese can borrow the needed dollars through the foreign exchange market
The central question in economics is how to
a. make the best use of scarce resources. b. use government planning agencies. c. induce people to want less. d. increase human knowledge.
The fastest growing part of the federal government budget since WWII is:
a. interest payments on the debt. b. transfer payments. c. defense spending. d. infrastructure.