Why are inputs not included in the calculation of the gross domestic product?
What will be an ideal response?
Gross domestic product of a country is the final value of all goods and services produced within the borders of the country during a particular year. Therefore, the value of raw materials is implicitly counted when we value the final good. If the value of the input is counted separately, it would result in double-counting.
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For the federal deficit to be lowered,
A) the federal government must decrease its spending and increase net exports. B) the federal government's expenditures must be lower than its tax revenue. C) the Federal Reserve must reduce the money supply. D) the Federal Reserve must raise interest rates and lower the required reserve ratio.
A change in expectations in the new classical model
a. shifts the aggregate supply curve. b. must reflect a change in the anticipated changes in the economy. c. shifts the aggregate demand curve. d. both a and b. e. none of the above.
Which of the following accounted for the highest percentage of state and local spending?
a. education and health care b. police and fire protection c. highways d. social security
The short-run effects of an increase in the expected price level include
a. a lower level of output and a lower price level. b. a lower level of output and a higher price level. c. a higher level of output and a lower price level. d. a higher level of output and a higher price level.