State and define all the components of the GDP of an economy when it is measured by using the expenditure method
GDP, as measured by expenditure, is commonly divided into five parts: consumption, investment, government spending, exports, and imports.
Consumption is spending by households on goods and services. Investment is the spending on capital, equipment, inventories, and structures. Government spending is spending on goods and services by local, state, and federal governments. Net exports are a measure of the gap between exports and imports. It is also referred to as the trade balance of an economy. Exports are the spending on domestically made goods that are sold abroad. An increase in exports adds to GDP, since such goods are produced locally but purchased external to the economy. Imports are spending on goods produced in other countries. An increase in imports lowers GDP since domestic dollars are spent on goods and services produced elsewhere.
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Refer to Figure 15-17. An economics professor argues: "I think the course should be priced so as to achieve economic efficiency." Which price should this faculty member favor?
A) $0 B) $40 C) $88 D) $150
The solution of a game is dependent upon
a. predicted response of competitors b. the existence of a perfectly inelastic demand curve c. costs of production being constant d. economies of scale in production e. marginal revenue being equal to marginal cost
If an economy has been operating below its potential output level,
a. frictional unemployment is too high b. more individuals should begin entering the labor force c. the government should create more jobs d. unemployment is likely rising. e. the production possibilities frontier will shift
A concentration ratio refers to the
a. ranking of firms by profitability b. percentage of sales accounted for by the leading firms in an industry c. percentage of sales accounted for by the largest firm in an industry d. ability of a firm to control market price e. percentage of profit accounted for by the largest firm in an industry