Why should imports be excluded from gross domestic product? How is a purchase of an import recorded in the components of GDP?
What will be an ideal response?
Imports are purchases by domestic buyers of goods and services produced abroad and gross domestic product is a measure of domestic production of goods and services. Any purchase of an import is included as a positive in consumption, and then subtracted out of GDP by recording it also as an import.
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In most cases, the higher is the quality of the collateral for a loan is
A) the higher is the interest rate. B) the lower is the interest rate. C) the riskier is the loan. D) the greater is the handling charge for the loan.
Which of the following conclusions is not supported by the Three-Sector-Model?
a. A decrease in borrowing demand causes the real risk-free interest rate to fall and equilibrium quantity of real loanable funds to rise. b. An increase in the supply of a nation's real loanable funds reduces the real risk-free interest rate and increases the equilibrium quantity of real loanable funds. c. An increase in a nation's demand for goods and services within the intermediate range results in an increase in the real GDP and a higher GDP Price Index. d. An increase in the value of a nation's currency encourages domestic imports and discourages exports. e. All of the above are supported by the Three-Sector Model.
A decrease in the price of coffee, other things being equal, causes a(n):
A. leftward shift in the demand curve for coffee. B. downward movement along the demand curve for coffee. C. rightward shift in the demand curve for coffee. D. upward movement along the demand curve for coffee.
Critics of the U.S. definition of poverty claim it is an inaccurate measure of our poor because:
A. it is a single number that does not capture regional differences in the cost of living. B. it fails to account accurately for expenditures other than food. C. the ratio of food to total income is different now than when the definition of poverty was defined. D. All of these are true.