The value-added approach of calculating GDP:
A. is especially useful when thinking about services involved in the resale of existing goods.
B. lets us break down the total value paid and see how much of it was created at each step of the production process.
C. is an alternative, and equally valid, way of avoiding the problem of double-counting.
D. All of these are correct.
Answer: D
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Any cost of negotiating or enforcing a contract is
a. an external cost. b. a private cost. c. a transaction cost. d. a side payment.
High expected inflation leads to ________ increases in wages and costs and to ________ actual inflation.
A. small; high B. large; low C. large; high D. small; low
Why is the production possibilities frontier bowed out?
What will be an ideal response?
In the figure above, assume that output is $10.5 trillion, while potential output is $12 trillion. Suppose that a combination of fiscal stimulus and recovery of consumer and business confidence shifts the IS and AD curves, as shown in the figure
The equilibrium real interest rate is ________ percent. A) 3 B) one C) 2.5 D) 2 E) zero