In measuring Gross Domestic Product, goods produced by foreign firms in the United States are
A. not counted, but goods produced by American firms in foreign countries.
B. counted, and so are goods produced by American firms in foreign countries.
C. counted, but goods produced by American firms in foreign countries are not counted.
D. not counted, and goods produced by American firms in foreign countries are also not counted.
Answer: C
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Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
With a per-unit tariff of Pt?Pc, the total amount of tariff revenue collected on this product will be
A. Pa?Pt times y?w. B. Pt?Pc times y?w. C. Pt?Pc times z. D. Pa?Pc times x.
If the Federal Reserve wants to control the level of interest rates
A) it must keep the supply of money constant. B) it must let the money supply grow at a constant rate. C) it can do so only if it also stabilizes nominal GDP. D) it will have to give up control of the money supply.
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the outcome will be that the incumbent
A) deters entry. B) chooses the Stackelberg leader level of output but the potential entrant does not enter anyway. C) chooses the Stackelberg leader level of output and the potential entrant enters. D) deters entry and earns zero profit.
The production possibilities frontier represents the boundary between attainable and unattainable prices of commodities
a. True b. False