The value of currently produced final goods and services measured in constant prices is called:
A) real GDP.
B) nominal GDP.
C) imputed values.
D) inflation.
A
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Which of the following is not true of the terms of trade?
a. They are determined by supply and demand factors. b. They lie somewhere between the opportunity costs of the trading partners. c. GATT begins negotiations on the terms of trade. d. They depend on negotiations between trade partners. e. They often favor one partner more than the other.
In the long run, all of a firm's costs are variable. In this case the exit criterion for a profit-maximizing firm is to shut down if
a. price is less than average total cost. b. price is greater than average total cost. c. average revenue is greater than average fixed cost. d. average revenue is greater than marginal cost.
Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions. This would be an example of:
A. moral hazard. B. the principal-agent problem. C. logrolling. D. rent-seeking behavior.
What is the marginal propensity to consume, and why is it always less than one?
What will be an ideal response?