Double counting in the national income accounts will be avoided if GDP is computed by totaling all:
A. sales.
B. sales of final output.
C. production costs.
D. sales of final output and intermediate goods.
Answer: B
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The above figure shows Sam's budget line and one of his indifference curves. What combination of coffee and gasoline will Sam select?
A) combination a because that contains all the gasoline he needs and still has some coffee B) combination c because that contains all the coffee he needs and some gasoline C) combination b because it is on his budget line and on the highest attainable indifference curve D) none of the above
"Higher ethanol production definitely and directly raises the price of corn," said USDA economist Ephraim Leibtag. In the long run in the corn market, what is TRUE if the production of ethanol increases?
A) Existing corn farmers will exit the market and decrease the market price. B) New corn farmers will enter the market and increase the market price. C) Existing corn farmers will exit the market and increase the market price. D) New corn farmers will enter the market and decrease the market price.
The difference between money and income is that whereas income is an individual's
A) flow of earnings over a period of time, money is an individual's stock of currency and currency substitutes. B) stock of all assets, money is an individual's stock of currency and currency substitutes. C) flow of earnings over a period of time, money is an individual's stock of all assets. D) stock of currency and currency substitutes, money is an individual's stock of all assets.
If the price of inputs falls and the level of consumer indebtedness rises:
a. Price index falls, and the change in real GDP is uncertain. b. The change in price index is uncertain, and real GDP rises. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and real GDP falls.