Gross domestic product (GDP)
a. always increases over time
b. increases only if prices increase because the goods and services are measured in current prices
c. increases only if output of good and services increase
d. increases only if either prices increase or output increases, but not a combination of both
e. increases with either an increase in prices or an increase in output, or a combination of both
E
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Suppose the cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda. B. drink a third glass of soda if the benefit of doing so is positive. C. not drink a third glass of soda. D. drink a third glass of soda if his benefit from drinking his second glass of soda was positive.
The private sector balance is equal to ________
A) income minus consumption minus net taxes B) income minus consumption minus investment C) saving minus investment D) income minus consumption
As the multiplier process works through time, the size of the multiplier effect becomes
A. larger. B. smaller. C. constant. D. explosive.
The opportunity cost of a decision is the
A. value of the best alternative not chosen. B. cost of making the wrong choice. C. cost incurred by others who are unhappy with your decision. D. value of all the alternatives not chosen.