QN=72 (17786) If you buy a burger and fries at your favorite fast food restaurant,
a. then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.
b. then GDP will be higher, but consumption spending will be unchanged.
c. then GDP will be unchanged, but consumption spending will be higher.
d. then both GDP and consumption spending will be higher.
d. then both GDP and consumption spending will be higher.
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When the exchange rate between the U.S. dollar and the euro changes from 1.07 euros per dollar to 0.93 euros per dollar, then the
A) U.S. dollar has depreciated against the dollar. B) U.S. dollar has depreciated against the euro. C) euro has depreciated against the dollar. D) U.S. dollar has appreciated against the euro. E) euro has depreciated against the euro.
When those most likely to produce the outcome insured against are the ones who purchase insurance, insurance companies are said to face the problem of
A) fraudulent claims. B) moral hazard. C) adverse selection. D) pecuniary purchases.
Returns to specialization can occur when
A) increasing the amount of labor allows workers to specialize. B) the exponents of the Cobb-Douglas production function are greater than 1. C) a firm doubles its inputs. D) the average cost curve is above the marginal costs curve.
On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?
a. The lack of a fireworks display in Yankeeville arises because of an externality. b. The lack of a fireworks display in Yankeeville arises because the free-rider problem does not apply to goods such as fireworks displays. c. In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately irrational. d. All of the above are correct.