The sum of all the goods and services produced by an economy over a given time period is known as its
a. total wealth.
b. functional distribution.
c. total capital.
d. total product.
d. total product.
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What is the current equilibrium price level and real GDP for the economy illustrated in the figure above? Does this economy have an inflationary gap, a recessionary gap, or neither?
As it adjusts toward full employment, which curve shifts? What is the equilibrium real GDP and price level that the economy will ultimately reach?
Over what range of prices does a shortage arise? What happens to the price when there is a shortage?
What will be an ideal response?
If education has positive externalities, _____
a. the resources will be efficiently allocated in providing education b. the private costs of production will be lower than the social costs c. the government can help to bring about a more efficient allocation through subsidies d. the benefits of consumption accrue only to the consumers e. the government can help to bring about a more efficient allocation by levying education cess
For any value of the MPC (marginal propensity to consume), the formula for the expenditure multiplier is
a. 1/(1 - MPC) b. 1/MPC c. 1/(MPC - 1) d. (1 + MPC)/MPC e. 1/(1 + MPC)