Refer to Table 19-2. Suppose that a simple economy produces only four goods and services: shoes, DVDs, tomatoes, and ketchup. Assume one half of the tomatoes are used in making the ketchup and the other half of the tomatoes are purchased by households. Using the information in the above table, nominal GDP for this simple economy equals
A) $7,400.
B) $6,400.
C) $5,800.
D) 2,440 units.
B
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A laissez-faire policy may be an effective antitrust policy if markets are
a. c and d b. d and e c. oligopolistic d. competitive e. contestable
When the market basket is tracked over time the goods within the basket:
A. reflect the typical consumer each year, but prices are held constant, so it captures if we are consuming more or less as an economy. B. remain the same, so only changing prices are captured. C. remain the same, but some prices are held constant on items that are important to consumers. D. reflect the typical consumer each year, so it captures how consumers are affected each year.
According to Keynes, when the economy falters, the government should do any of the following except
A. Make more money available. B. Buy more output. C. Practice a laissez faire policy approach. D. Provide more dollars for unemployment benefits.
Which diagram in Figure 15.1 best represents the Keynesian view of investment demand when monetary policy is effective?
A. a. B. b. C. c. D. d.