If depreciation equals zero and retained earnings equal $5 billion, then
A. Net national product is less than GNP by $5 billion.
B. GNP is greater than GDP by $5 billion.
C. GNP is less than net national product by $5 billion.
D. GNP equals net national product.
Answer: D
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According to the menu cost theory, firms will be slow in changing their prices because
A) if prices changed frequently, individuals would reduce their demand for that good because of uncertainty. B) frequent price changes would be a sign of monopolistic behavior. C) the cost of changing the price might exceed the additional revenue the price change would generate. D) demand for their product would fall because consumers would purchase goods from firms that had not raised their prices.
Financial markets
A) channel funds indirectly between borrowers and lenders. B) channel funds directly from lenders to borrowers. C) act as go-betweens by holding a portfolio of assets and issuing claims based on that portfolio to savers. D) generally provide lenders with lower returns than do financial intermediaries.
For an economy with only two goods, skate boards can be added to bicycles to compute the GDP by
A. Dividing dollar values of output by price and adding the result. B. Dividing output by price and adding the resulting dollar values. C. Multiplying output by price and adding the resulting dollar values. D. Multiplying dollar values of output by price and adding the result.
Economists generally define the short run as being
A) that period of time in which at least one of the firm's inputs, usually plant size, is fixed. B) that period of time in which all inputs are variable. C) any period of time less than one year. D) any period of time less than six months.