The total value of all final goods and services, measured in current market prices, produced in an economy during a year is
a. total domestic product
b. gross domestic product
c. real GDP
d. gross value product
e. total final product
B
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Which of the following is false? a. If the Fed wants to expand the money supply, it could lower the discount rate
b. The discount rate is a relatively unimportant monetary policy tool, mainly because member banks do not rely heavily on the Fed for borrowed funds. c. Changes in required reserve ratios are such a potent monetary policy tool that they are frequently used. d. If the Federal Reserve wanted to induce monetary expansion, it could reduce reserve requirements, but it cannot force the banks to make loans, thereby creating new money.
If Japan is twice as good at producing cameras and three times as good at producing TV sets as the United States, Japan is said to have a comparative advantage in TV sets and the United States has a comparative advantage in cameras.
Answer the following statement true (T) or false (F)
Which of the following is not likely to be a government objective?
a) Increasing employment b) Increasing economic growth c) Increasing government spending d) Increasing the level of exports
According to the theory of purchasing-power parity, the nominal exchange rate between two countries must reflect the differing
a. price levels in those countries. b. resource endowments in those countries. c. income levels in those countries. d. standards of living between those countries.