Until recently, George lived in a home that was newly constructed in 2005 . In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,000 . Which of the following statements is correct regarding the sale of the house?
a. The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP.
b. The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP.
c. The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000.
d. The 2006 sale affected neither 2005 GDP nor 2006 GDP.
D
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Policy that tries to influence target variables by changing the tax rates is called
A) fiscal policy. B) tax rate policy. C) recession policy. D) monetary policy.
Firms in perfectly competitive markets typically have:
A. one profit-maximizing level of output. B. two profit-maximizing levels of output to choose from. C. several profit-maximizing levels of output to choose from. D. no chance of maximizing profits, since they have no control over market price.
Which of the following explanations of the business cycle focuses on both aggregate supply and aggregate demand shifts?
A. Monetarist explanations B. Keynesian explanations C. Supply-side explanations D. Eclectic explanations
Dell Computers allows potential consumers to customize personal computers to their desires. Dell's strategy is successful because offering bundles that more exactly meet a consumer's preference allows Dell to extract more consumer surplus
Indicate whether the statement is true or false