Consumption of fixed capital (depreciation) can be determined by:
A. adding taxes on production and imports to NDP.
B. subtracting NDP from GDP.
C. subtracting net investment from GDP.
D. adding net investment to gross investment.
B. subtracting NDP from GDP.
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What do economists mean when they say that a firm's plant is fixed?
What will be an ideal response?
The problem of asymmetric information that brings about a general decline in product quality in an industry is
A) a market failure. B) the result of government regulation. C) creative response. D) the lemons problem.
Ceteris paribus, an increase in the price of a good will cause the
a. quantity demanded of the good to increase. b. quantity supplied of the good to decrease. c. producer surplus derived from the good to increase. d. supply of the good to decrease.
If purchasing-power parity holds, when a country's central bank increases the money supply, a unit of money
a. gains value both in terms of the domestic goods and services it can buy and in terms of the foreign currency it can buy. b. gains value in terms of the domestic goods and services it can buy, but loses value in terms of the foreign currency it can buy. c. loses value in terms of the domestic goods and services it can buy, but gains value in terms of the foreign currency it can buy. d. loses value both in terms of the domestic goods and services it can buy and in terms of the foreign currency it can buy.