In using the expenditure approach to GDP, consumption
A. Includes houses and all purchases by business firms.
B. Includes consumer durables, semi-durables, nondurable goods, but excludes services.
C. Includes houses and services.
D. includes consumer durables, semi-durable goods, nondurable goods, and services.
Ans: D. includes consumer durables, semi-durable goods, nondurable goods, and services.
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In a market system, the major coordination tasks are carried out
A. with the approval of central planners. B. as part of the regular appropriation process of Congress. C. irregularly by the major corporations. D. automatically by the market mechanism.
Suppose nominal aggregate demand falls by 3 percent while nominal wages are fixed
If firms were to lower their prices by 3 percent, this would ________ the drop in real output, with such pricing ________ an assumption that firms are profit-maximizers. A) prevent, in violation of B) prevent, consistent with C) worsen, in violation of D) worsen, consistent with
Regarding the production possibilities curve, an improvement in technology will
A. cause a movement downward along the curve B. shift the curve to the right. C. shift the curve o the left. D. cause a movement downward along the curve.
The level of household savings constrains firm investment.
Answer the following statement true (T) or false (F)