The following provides data for an economy in a certain year. Consumption expenditures$1,000Imports$600Government purchases of goods and services$700Construction of new homes and apartments$500Sales of existing homes and apartments$600Exports$500Government payments to retirees$200Household purchases of durable goods$300Beginning-of-year inventory$500End-of-year inventory$600Business fixed investment$300Given the data, compute the investment component of GDP.
A. $900
B. $400
C. $300
D. $800
Answer: A
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If a government raises its expenditures by $50 billion and at the same time levies a lump-sum tax of $50 billion, the net effect on the economy will be to
A. increase real GDP by $50 billion. B. increase real GDP by more than $50 billion. C. make no change in real GDP. D. increase real GDP by less than $50 billion.
________ natural resources are natural resources that can be used repeatedly, and ________ natural resources are natural resources that can be used only once
A) Nonrenewable; renewable B) Renewable; hydrocarbon C) Renewable; nonrenewable D) Non-fossil; fossil
All else held constant, as the variance of a payoff increases, the
A) expected value of the payoff increases. B) risk of the payoff increases. C) expected value of the payoff decreases. D) risk of the payoff decreases.
What are the three basic questions faced by every economy?
a. What, how, and for whom will goods be produced? b. When, where, and how much will be produced? c. Why, where, and when will goods be produced? d. How, how much, and why will goods be produced?