We measure gross domestic product by multiplying the quantities of goods by their prices because it allows us to
A) calculate the total number of units of goods produced in an economy.
B) correct for inflation.
C) directly compare the output of one economy to that of another.
D) express the values of products in a common unit of measurement.
D
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Starting from a long-run equilibrium, an increase in potential output leads to ________ gap in the short run and to ________ rates of inflation in the long run.
A. a recessionary; lower B. an expansionary; lower C. an expansionary; higher D. a recessionary; higher
The reforms, acts and programs that emerged during the New Deal were dissolved quickly at the end of the Great Depression. On this front, the New Deal command economy was similar to the World War I command economy
Indicate whether the statement is true or false
Long-run equilibrium in a competitive price-searcher market requires that
a. the demand curve intersect the average cost curve. b. the demand curve be tangent to the average cost curve. c. price be equal to marginal cost. d. quantity produced be at the point where average cost is at a minimum.
Refer to the following graph. The price of capital (r) is $20.
At the optimal combination of inputs for producing 14,000 units of output, what is the marginal rate of technical substitution?
A. 0.80 B. 2.5 C. 1.5 D. 0.67 E. impossible to tell from the graph