In what category of national income accounting is the purchase of a computer by a business?
A. It is a form of investment spending.
B. It is considered consumption.
C. It is ignored because computers are considered intermediate goods-an input in the production of other goods and services.
D. It is a form of savings.
Answer: A
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High tariffs on intermediate inputs
A) increase the effective rate of protection on final goods. B) have no impact on the effective rate of protection on final goods. C) decrease the effective rate of protection on final goods. D) lower the nominal rate of protection on final goods. E) raise the nominal rate of protection on final goods.
When unions cause wages to rise above the equilibrium wage,
a. a surplus of labor results. b. a shortage of labor results. c. the demand for labor rises. d. the demand for labor falls.
The foreign exchange rate affects agriculture because
A) A weaker dollar makes depresses the export demand for U.S farm commodities. B) A stronger dollar enhances the export demand for U.S. farm commodities. C) A weaker dollar makes imports of inputs used by U.S. farmers. D) None of the above.
Consider a small open economy with desired national saving of Sd = 1000 + 1000rw and desired investment of Id = 1000 - 500rw.Calculate national saving, investment, and the current account balance in equilibrium when the real world interest rate is(a)rw = 0.025.(b)rw = 0.05.(c)rw = 0.0.
What will be an ideal response?