Which one of the following is NOT included in GDP?
A. You give up a weekend of leisure to repair your roof yourself.
B. You purchase $20 worth of first aid supplies at the local drugstore to treat the cuts and scrapes you suffered while crawling around on the roof.
C. You pay a roofer $2,000 to repair your roof after you discover leaks have appeared due to normal wear and tear.
D. You pay a roofer $2,000 to repair your roof after it is damaged in a hailstorm.
Answer: A
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Suppose that the exchange rate between British pounds and U.S. dollars is originally $2.50 per pound. If it then changes to $3 for 1 pound, exports of U.S. goods to Britain will tend to: a. rise
b. fall. c. stay the same. d. change in an indeterminate direction.
All points on the production possibilities frontier
A) are production inefficient. B) achieve allocative efficiency. C) are production efficient but only one point achieves allocative efficiency. D) are allocatively efficient but only one point achieves production efficiency. E) are allocatively inefficient.
Under the gold standard, the government must have enough gold to back up any
A) change in its currency's exchange rate. B) foreign currency deposits in its central bank. C) increase in money demand. D) increase in the money supply.
Which statement is not consistent with Joseph Schumpeter's hypothesis?
a. Monopolies use profit to invest in research and development. b. Monopolies end up being more efficient than competitive firms. c. Monopoly prices end up being lower than prices generated in perfect competition. d. Perfect competition is more conducive to innovation than monopoly. e. Perfect competition is more efficient than monopoly.