When lumber from Brazilian forests is used by a U.S.-owned company to produce furniture in Canada, the value of the furniture produced will be counted as a final good in
A) U.S. GDP.
B) Canada's GDP.
C) Brazil's GDP.
D) Brazil's GNP.
Answer: B
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Why do we need a units-free measure of the responsiveness of the quantity demanded of a good or service to a change in its price?
What will be an ideal response?
The federal government has a large public debt that it finances through borrowing. As a result, real interest rates are higher than otherwise and the volume of private investment spending is lower. This illustrates the:
A. equation-of-exchange effect. B. paradox of thrift. C. crowding-out effect. D. net export effect.
The variable cost to the producer is
A. the area under the supply curve from the origin to the quantity produced. B. the area under the demand curve from the origin to the quantity purchased. C. the area under the demand curve but above the price line from the origin to the quantity purchased. D. the area above the supply curve but below the price line from the origin to the quantity purchased.
The nominal interest rate is 12 percent and the inflation rate is 4 percent. The opportunity cost of holding a dollar for a year is
A) 16 cents. B) 88 cents. C) 48 cents. D) 12 cents. E) 8 cents.