To calculate value added, we need to subtract
A) only the cost of domestically-produced intermediate inputs.
B) only the cost of foreign-produced intermediate inputs.
C) the cost of domestic- and foreign-produced intermediate inputs.
D) total imports.
C
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In a fully-funded social security program
A) the young pay for the benefits of the old. B) the young are forced to save for their own retirement. C) the young have to buy bonds for the old. D) the young are forced to save for the retirement of the old.
Define opportunity cost
When the federal budget is used as a tool for economic stabilization, the ideal goal is to
a. balance the budget over the entire business cycle. b. balance the budget each year. c. balance the budget during expansions. d. run a surplus during contractions.
The target rate of inflation for the ECB is
(a) Above 2%; (b) Below, but close to, 2%; (c) 0%; (d) None of the above, because the ECB targets a rate of deflation.