______ is achieved when depreciation is subtracted from gross national product.
a. Personal income
b. National income
c. Net national product
d. National domestic product
c. Net national product
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Theoretically, the market demand for a public good is found by
a. vertically addingthe MEC and MPCfunctions b. overcomingfree-ridership and vertically summingthe price responses for each quantity c. adding horizontally the marginal benefits received by each consumer at every price level d. summing the quantities each person is willing and able to buy at each and every price
Use the following table which shows the aggregate demand and aggregate supply schedules for a hypothetical economy to answer the next question.Real Domestic Output Demanded (in billions)Price Level (index value)Real Domestic Output Supplied (in billions)$3,000350$9,0004,0003008,0005,0002507,0006,0002006,0007,0001505,0008,0001004,000The equilibrium price and output levels will be ________.
A. 250 and $7,000 B. 200 and $5,000 C. 300 and $8,000 D. 200 and $6,000
Suppose the cost of raw materials used by the cotton industry rises to a larger extent compared to the increase in demand in the market. Which of the following situations will arise?
a. The incidence of the higher cost will fall completely on the consumers. b. The incidence of the higher cost will fall completely on the high cost firms. c. The incidence of the higher cost will fall completely on the low cost firms. d. The incidence of the higher cost will fall partially on the consumers and partially on the sellers.
Classical economists or modern day monetarists would suggest that the Fed should
a. always lower the discount rate in order to combat recessions b. increase the reserve requirement in order to reduce the threat of inflation c. set the rate of increase in the money supply to be approximately equal to the economy's long-run full-employment rate of growth d. set the rate of increase in the money supply to be approximately equal to the discount rate e. use its tools, such as raising the discount rate, increasing the reserve requirement,and selling securities, in order to bring inflation down to 0 percent