For purposes of calculating GDP using the expenditure approach, which of the following payments is NOT included in the government spending component?
A. The wages paid by a state government to the workers in its welfare department
B. Social Security pensions
C. The wages paid by a local government to its road crew
D. The federal government's purchase of a submarine from a shipbuilder
B. Social Security pensions
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Refer to Figure 2-14. What is the opportunity cost of producing 1 popsicle in Iceland?
A) 1 1/2 snow cones B) 3/4 of a snow cone C) 2/3 of a snow cone D) 270 snow cones
A firm that buys foreign exchange in order to take advantage of higher foreign interest rates is
A) speculating. B) demonstrating purchasing power parity. C) engaging in interest rate arbitrage. D) responding to fluctuations in the business cycle. E) ignoring the nominal rate of exchange.
We know the following about a tie manufacturer: tie sales $1,300, cotton purchases $750, wages $400, interest on business loans $100, and profits $50. What is the contribution to GDP of this producer using the income approach?
A) $550 B) $500 C) $450 D) $400
Which of the following would be best classified as a private good?
A) a missile defense system B) police force C) radio frequency D) clothing