The value of intermediate goods is:
A. excluded from both GDP and GNP.
B. included in GNP but not GDP.
C. included in GDP but not GNP.
D. included in both GDP and GNP.
Answer: A
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One drawback in using fiscal policy as a stabilization tool is that fiscal policy:
A. is not useful for dealing with prolonged episodes of recession. B. effects are frequently offset by automatic stabilizers. C. affects potential output as well as aggregate expenditure. D. is too flexible to use to close output gaps.
GDP in a country grew from $10 billion to $14 billion over the span of 5 years. The percentage change in GDP was
A) 4%. B) 7%. C) 10%. D) 40%.
An improvement in a country's balance of payments means a decrease in its balance of payments deficit, or an increase in its surplus. In fact we know that a surplus in a balance of payments
A) is always beneficial. B) is usually beneficial. C) is never harmful. D) is sometimes harmful. E) is always harmful.
Refer to the above figure. Suppose there are L4 workers in the union, and the union wants all of its workers to have a job. It will set the wage rate at
A) W1. B) W2. C) W3. D) W4.