A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?
a. consumption and imports
b. consumption but not imports
c. imports but not consumption
d. neither consumption nor imports
a
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If Table 12.2 represents all the investments available to the economy, the nominal interest rate is 2.5 percent and there is no inflation, what will be the level of investment in the economy?
A) $0 B) $200 C) $600 D) $900
Using the scenario above what might the instructor do to avoid this same result?
What will be an ideal response?
The philosopher John Rawls argued that if people could make arrangements about how society would be organized before they were born that one of the principles that we would agree upon is that social and economic inequalities are to be arranged so
that they are to be of the greatest benefit to the least-advantaged members of society. What economic strategy sounds akin to this idea? Explain.
As long as there is asymmetric information among consumers and positive search cost, if price is below the monopoly price and the same across all firms, then a competitive firm
A) can always profit from raising its price. B) can always profit from lowering its price. C) can profit from raising its price but by no more than the search cost. D) can profit from lowering its price but by no more than the search cost.