GDP uses the market value of goods and services because it:
A. provides the opportunity to compare lists of outputs to see who produced more.
B. markets are the only way to value goods and services.
C. provides a common valuation that allows us to compare one economy to another.
D. is the only data that can be gathered about goods and services.
Answer: C
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As the price of a pound of peanuts falls, the
A) demand for peanuts increases. B) demand for peanuts decreases. C) quantity of peanuts demanded increases. D) Both answers A and C are correct.
Spacely Sprockets, Inc, usually pays $1,000 for a million flanges, which it uses as inputs in the manufacture of sprockets. It also spends an average of $20 per million flanges on finding manufacturers and negotiating contracts. Spacely is capable of making its own flanges at a cost of $980 per million. Given these costs,
a. Spacely should continue to contract out for flanges b. Spacely should start to manufacture its own flanges c. it's not possible to say what Spacely should do d. Spacely should stop paying the additional $20 to find and negotiate contracts and just buy the flanges outright for $1,000 per million e. Spacely should move away from the use of flanges and toward an input that it can produce by itself
Economists call the idea that increases in government spending cause decreases in private investment
a. crowding out b. locking in c. the liquidity trap d. automatic stabilization e. the Phillips trade off
A move from E to F represents
A. an increase in quantity demanded.
B. a decrease in quantity demanded.
C. an increase in demand.
D. a decrease in demand.