Three customers bought identical cellular phones this morning from Phil's Phone Shop. Amy bought one to call her mom and boyfriend. Brad's boss sent him to buy one to use to keep in touch with the office when he is out of his office. The local city
government had Cecilia, the town manager, buy one to receive calls while in the field. What are the different types of good classifications between the three cellular phones? Where will these purchases be recorded in GDP?
Amy's phone is a consumption good; Brad's is a capital good; and Cecilia's is a government good. The
purchase of Amy's phone will be included in consumption expenditures, Brad's in gross private domestic
investment, and Cecilia's in government purchases.
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Which of the following monetary policies could reduce the amplitude of oscillations of output around its natural level?
A) raising interest rates before actual output attains its natural level B) lowering interest rates when an economy is still overheated C) lowering interest rates when output is above its natural level D) all of the above.
The above figure shows the demand curve for crude oil. The demand curve has unitary price elasticity when price equals
A) $0. B) $1. C) $10. D) $20.
A decrease in government spending and taxes would be an example of fiscal policies that reinforce each other.
Answer the following statement true (T) or false (F)
The greater the marginal propensity to import, the
A. smaller is the level of consumption. B. greater is the net export. C. greater the level of investment. D. smaller the spending multiplier.