The income approach to GDP equals
A. Employee Compensation - Profit - Net Property Income - Indirect Business Taxes - Depreciation - Income Earned Abroad.
B. Consumption + Gross Investment + Government Purchases + Net Exports.
C. Employee Compensation + Profit + Net Property Income + Indirect Business Taxes + Depreciation - Income Earned Abroad.
D. Consumption + Net Investment (Gross Investment-Depreciation) + Government Purchases + Net Exports.
Answer: C
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The costs of investment depend on the ________ and the ________.
A. price of new capital goods; real interest rate B. relative price of the firm's output; real interest rate C. marginal product of capital; relative price of the firm's output D. taxes levied on the revenue generated; relative price of the firm's output
Under a fixed exchange rate system, a currency devaluation ________ the nominal exchange rate and will ________ net exports
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services
a. True b. False Indicate whether the statement is true or false