GDP is $7 trillion. If consumption is $3.5 trillion, investment is $1.4 trillion, and government purchases are $2.1 trillion, then:
A. imports exceed exports.
B. exports exceed imports.
C. exports are equal to imports.
D. net exports cannot be determined from the available information.
Answer: C
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Costs that are incurred when people engage in a trade
A) are a waste of resources because they do not create benefits of equal or greater value. B) can be eliminated by substituting government regulation for voluntary exchange. C) reduce the amount of exchange that occurs. D) rise as the number of middlemen increases.
What happens to the interest rate when there is a decrease in the government’s budget surplus?
a. The interest rate will decrease. b. The interest rate will increase. c. The interest rate will either increase or decrease. d. The interest rate will remain the same.
Here's a taste of economic history: in the United States, rent controls were implemented in 450 designated areas during World War II because
a. residential construction had been curtailed due to the war effort b. houses were regarded as being essential to the war effort c. there was an excess supply of housing d. quantity demanded of housing decreased as soldiers went to war e. the price of housing became depressed due to falling demand for houses
"Assuming the long-run average cost curve is U-shaped, a firm will always seek to operate at the lowest point on the long-run average cost curve." True or false?
Indicate whether the statement is true or false