Explain the difference between GDP and GDI
What will be an ideal response?
GDP measures the value of total production in the economy by calculating the value of total expenditure on final goods and services. GDI measures the value of total production in the economy by calculating the value of total income.
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In economic language, children may sometimes be considered an "inferior good." What does that mean and why might it be true?
What will be an ideal response?
The long run is a period of time:
a. that is too short to change the size of a firm's plant. b. that is long enough to permit changes in all the firm's inputs, both fixed and variable. c. in which production occurs beyond one year. d. in which production occurs beyond five years.
Rational expectations are forecasts
A. that, while not necessarily correct, are the best that can be made given the available data. B. that are technically correct. C. that accurately predict the short-term trade-off between inflation and unemployment. D. made by economists using the most sophisticated econometric models.
Governments generally take responsibility for
A. determining the moral code. B. making sure the economy remains healthy. C. deciding what is produced by most businesses. D. the purchasing decisions of households.