One way to avoid counting the prices of intermediate goods multiple times in computing the value of GDP is to:
A. sum the value added of only producers of final goods and services.
B. sum the value added of producers of both intermediate and final goods and services.
C. sum the value added of only producers of intermediate goods and services.
D. subtract the value added of producers of intermediate goods and services from the value added of producers of final goods and services.
Answer: B
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Rationing schemes are often used during times of war because
a. the market will not come to equilibrium b. military forces cannot afford war supplies c. high prices erode popular support for the war effort d. it is a windfall gain to the typical consumer e. short lines are better than short pocket books
Money's principal function is to serve as a
a. standard for making loans. b. standard for credit reporting. c. medium of exchange. d. method for storing wealth.
When people anticipate a company’s earnings will drop, prospective stockholders want to pay ______ for a stock, and current stockholders ______ to sell.
a. less; are eager b. more; are eager c. less; are reluctant d. more; are reluctant
Proponents of a command economy argue that it promotes:
A. efficiency. B. equity. C. consumer sovereignty. D. economic growth.