How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?
What will be an ideal response?
U.S. GDP includes all production in the United States, regardless of who owns the factors of production used. Therefore, the production by the U.S. firm in France won't be counted in U.S. GDP because the production does not take place in the United States. However, the production by the French firm in the United States will be counted as part of U.S. GDP because the production has taken place in the United States.
You might also like to view...
State the fundamental identity of national income accounting. Why is it not possible for this identity to be violated?
What will be an ideal response?
A person has an absolute advantage in producing a good if he can
a. produce it using fewer resources than another person b. produce it while sacrificing less than another person in terms of foregone output c. corner the market d. use other peoples' money to produce it e. work out some long term payment plan for financing the good
Sometimes, the taxes with the smallest excess burden are:
a. progressive b. regressive c. proportional d. digressive
Absolute advantage is
A) producing at a lower opportunity cost. B) producing a good using the fewest inputs. C) producing a good only when demand is high. D) producing a good that requires imported components.