The two main approaches to measuring GDP are the
A. income approach and the expenditure approach.
B. government approach and the consumer approach.
C. flow approach and the stock approach.
D. concept approach and the reality approach.
Answer: A
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Expansionary monetary policy is achieved by:
A) decreasing the amount of bank reserves and lowering the federal funds rate. B) decreasing the amount of bank reserves and raising the federal funds rate. C) increasing the amount of bank reserves and lowering the federal funds rate. D) increasing the amount of bank reserves and raising the federal funds rate.
The ability of a central bank to set monetary policy goals is
A) political independence. B) goal independence. C) policy independence. D) instrument independence.
Lori and Maya are competitors in a local market. Each is trying to decide if it is better to advertise on TV, on radio, or not at all. If they both advertise on TV, each will earn a profit of $10,000 . If they both advertise on radio, each will earn a profit of $14,000 . If neither advertises at all, each will earn a profit of $20,000 . If one advertises on TV and other advertises on radio, then
the one advertising on TV will earn $16,000 and the other will earn $6,000 . If one advertises on TV and the other does not advertise, then the one advertising on TV will earn $30,000 and the other will earn $4,000 . If one advertises on radio and the other does not advertise, then the one advertising on radio will earn $24,000 and the other will earn $8,000 . If both follow their dominant strategy, then Lori will a. advertise on TV and earn $10,000. b. advertise on radio and earn $14,000. c. not advertise at all and earn $20,000. d. None of the above is correct. Lori and Maya do not have dominant strategies.
Refer to Figure 3. Originally, Ben was producing at his point A and Jerry was producing at his point A. Then, each person decided to specialize in the product in which he has a comparative advantage. Furthermore, they agreed to trade 4 pounds of cones for 2 pounds of ice cream. As a result of these new arrangements, the gains from trade relative to the original situation are as follows:
a. 1 additional pound of cones for Ben and 1 additional pound of ice cream for Jerry.
b. 1 additional pound of ice cream for Ben and 1 additional pound of cones for Jerry.
c. 2 additional pounds of ice cream for Ben and 2 additional pounds of cones for Jerry.
d. 2 additional pounds of ice cream for Ben and 1 additional pound of cones for Jerry.