A farmer sells raw milk for 50 cents to a dairy, who sells cheese made from it for $1.50 to a grocery wholesaler, who sells it for $1.90 to a supermarket, who sells it to the final consumer for $2.19. These transactions increase the GDP by
A) $0.50 + $1.00 + $0.40 + $0.29 = $2.19.
B) $0.50 + $1.00 + $1.90 + $2.19 = $5.59.
C) $0.50 + $1.00 = $1.50.
D) $2.19 - $1.50 = $0.69.
E) $2.19 - $0.50 = $1.69.
A
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Which of the following is a true statement about equilibrium in the foreign exchange market?
A) Net exports are zero. B) The expected return on domestic assets is equal to the expected return on foreign assets. C) Foreigners wish to purchase the entire supply of domestic assets. D) The relevant central banks meet regularly to choose the equilibrium exchange rate.
An economist might be hired to answer which of the following questions?
a. What will the price of oil be next year? b. Why is the median income of women about half the median income of men? c. How much will interest rates change as the federal deficit decreases? d. How much will inflation change if import restrictions are imposed? e. All of the above are correct.
The study of the economic behavior of individual households is included in macroeconomics
a. True b. False Indicate whether the statement is true or false
Which of the following statements is not correct?
a. Part of the deadweight loss associated with monopoly is measured by the monopolist's economic profit. b. Marginal cost is always less than average total cost in a natural monopoly. c. Discount coupons available free to the public are a type of price discrimination. d. Anti-trust laws make it harder for firms to create synergies.