When estimating GDP, changes in the level of inventory are calculated because:
a. it indicates the level of employment in the economy.
b. it provides information about a firm's expectations.
c. it is a good indicator of the competitiveness of the economy.
d. it shows the level of business spending by firms.
e. it determines the value of goods produced in a year but not sold in that year.
e
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Refer to Figure 15-9. What is the economically efficient output level?
A) 600 units B) 800 units C) 940 units D) 1160 units
Betty's Bakery bakes fresh bread every morning. Any bread not sold by the end of the day is thrown away. A loaf of bread costs Betty $2.00 to produce, and she prices loaves of bread at $3.50 per loaf. Suppose near the end of one day Betty still has 12 loaves of bread on hand. Which of the following is correct?
a. Betty should only sell the remaining bread for $3.50 per loaf since that is the regular price. b. Betty should only sell the remaining bread for $2.00 per loaf or more since that is what the bread costs to make. c. Betty should be willing to sell the remaining bread for any price above $0 per loaf since she will have to throw it away if she does not sell it for something. d. Betty should just throw the bread away and change the price of her bread starting tomorrow to make sure she sells all of her bread each day.
During the housing bust that began in 2006, the fewest foreclosures were among people with ______ mortgages.
a. subprime b. zero-down c. adjustable-rate d. fixed-rate
The goal of a perfectly competitive firm is to maximize its
A) normal profit. B) revenue. C) output. D) economic profit.