Which of the following is not a component of gross investment?
A. Construction of a suburban housing project.
B. The purchase of a new drill press by the Ajax Manufacturing Company.
C. The piling up of inventories on a grocer's shelf.
D. The purchase of 100 shares of AT&T by a retired business executive.
Answer: D
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In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?
What will be an ideal response?
In 2002 the steel industry successfully lobbied Congress to impose a tariff of 8 to 30 percent on foreign steel. Which of the following is an unintended consequence of this tariff?
(a) U.S. steel firms were protected from the price cutting efforts of foreign competitors benefiting from governmental support in their countries. (b) U.S. steel firms could charge higher steel prices in order to boost profits. (c) Many steel-using firms in the U.S. went out of business and about 200,000 workers lost their jobs to higher steel prices. (d) American steel workers kept their jobs.
In international finance, speculation involves: ·
a. not being able to make a commitment to buy or sell. b. taking a risk by purchasing (or selling) a foreign currency asset,holding it in anticipation of a rate increase (decrease). c. simultaneously buying several currencies to ensure that at least one will rise in value. d. avoiding risk of loss by offsetting an obligation to buy a foreign currency by locking in a contract to sell it at the same time.
The basic goals of total utility maximization, total profit maximization, and total welfare maximization explain most market activity.
Answer the following statement true (T) or false (F)