GDP can be calculated by summing up the "value added" at every stage of production.
Answer the following statement true (T) or false (F)
True
The value added is the amount by which the price goes up from the sale of an intermediate or final good.
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A firm will invest in a project if
A) the interest rate exceeds the opportunity cost of the project. B) the firm's level of capital is at the desired level. C) the firm's level of capital is higher than the desired level. D) the rate of return of the project is greater than the opportunity cost of the investment.
Assuming a market rate of interest equal to 7 percent and anticipated inflation is 2 percent, what is the real (adjusted for inflation) present value of $200 to be received one year from today?
A) $190 B) $214 C) $187 D) $210
The endowment effect:
A. refers to the observation that people tend to value something more highly when they own it than when they don't. B. refers to the observation that people tend to value something more highly when they don't own it than when they do. C. refers to the fact that when confronted with many alternatives, people sometimes avoid making a choice and end up with the option that is assigned as a default. D. refers to the observation that people do not have a strong attachment to the status quo.
A positive (non-zero) price for a good means there is a surplus of that good
a. True b. False Indicate whether the statement is true or false