Which of the following is a government purchase?
a. The income tax
b. The property tax
c. Social Security benefits paid to a retired government worker
d. Food stamps
e. The salary of a federal judge
E
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The value of goods produced, but unsold, in the current period is:
A. allocated to GDP in future periods when the goods are sold. B. counted in GDP as consumption spending. C. excluded from GDP. D. counted in GDP as inventory investment.
Suppose that Country A has an absolute advantage over Country B in the production of both wheat and cloth. The opportunity cost of 1 unit of wheat is 2 units of cloth in Country A and 3 units of cloth in Country B. It follows that production of both wheat and cloth will be maximized if
a. Country A specializes in cloth. b. Country A specializes in wheat. c. Country A produces both goods. d. both countries produce both goods.
Monetizing deficits has lead to serious inflation in
a. the United States. b. Canada. c. the United Kingdom. d. Russia, Latin America, and Israel. e. All of the above are correct.
The basket of goods in the consumer price index changes
a. occasionally, as does the group of goods used to compute the GDP deflator. b. automatically, as does the group of goods used to compute the GDP deflator. c. occasionally, whereas the group of goods used to compute the GDP deflator changes automatically. d. automatically, whereas the group of goods used to compute the GDP deflator changes occasionally.