Autonomous expenditure is spending that is:
A. based on the rate of borrowing.
B. that is determined by the government.
C. spent when income changes in the economy.
D. not sensitive to the level of income in the economy.
Answer: D
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Which of the following transactions is included in GDP?
a. You buy a used car for $10,000. b. An unemployed worker receives a check for $450 as unemployment benefits. c. You buy a one-acre lot in Florida where you plan to build a beach house. d. Toyota builds 1,000 Accords in Kentucky at a cost of $25,000 each but is unable to sell them and, therefore, they are added to inventory.
Which of the following is an example of hidden actions?
a. a mechanic tells you that you need an entire new engine when you only need a oil change. b. a sales person tells you that you look good in a dress when you don't c. a sales person tells you which color they think goes best with your paint you have chosen d. a sales person tells you which car gets the best gas mileage
Suppose that inventories were $40 billion in 2012 and $50 billion in 2013. In 2013, national income accountants would ________.
A. subtract $45 billion (= $90/2) from other elements of investment in calculating total investment B. add $45 billion (= $90/2) to other elements of investment in calculating total investment C. subtract $10 billion from other elements of investment in calculating total investment D. add $10 billion to other elements of investment in calculating total investment
When unemployment insurance benefits exceed the wages a worker could earn when employed, the worker will have an incentive to:
A. have his/her unemployment insurance benefits cancelled. B. decrease his/her reservation price. C. remain unemployed longer than otherwise. D. accept the first job offered.