GDP differs from GNP because
A. GDP = GNP - net factor payments from abroad.
B. GNP = GDP - capital consumption allowances.
C. GNP = GDP - net factor payments from abroad.
D. GDP = GNP - capital consumption allowances.
Answer: A
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
As output increases, economies of scale occur when the
A) long-run average cost increases. B) long-run average cost decreases. C) short-run average total cost decreases. D) long-run average cost stays constant. E) long-run fixed cost decreases.
Having interest rate stability
A) allows for less uncertainty about future planning. B) leads to demands to curtail the Fed's power. C) guarantees full employment. D) leads to problems in financial markets.
All of the following are arguments in support of protectionist legislation except:
A. increasing political pressure on rogue nations. B. increasing competition for domestic producers. C. increasing income equality. D. increasing tax revenues.