In the national income accounts, the purchases of durables, nondurables, and services by households are classified as:
a) consumption.
b) investment.
c) net exports.
d) government purchases.
Answer: a) consumption.
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A downward sloping income-demand curve indicates that the good is a necessity.
Answer the following statement true (T) or false (F)
"Gasoline purchases were up 10% last week, even though gasoline prices were 6 cents higher than the week before! You see, the law of demand does not hold for gasoline!" What is being misunderstood in the above statement?
A) Nothing at all. B) It implies the demand curve for gasoline is vertical. C) It fails to recognize that the demand curve has shifted to the right. D) It fails to hold constant all the other factors that influence demand.
The double taxation problem occurs because households pay taxes on dividends and capital gains from stock and corporations pay taxes on corporate profits
Indicate whether the statement is true or false
What are some reasons that hedge funds have become controversial?
What will be an ideal response?