The following table provides data for an economy in a certain year.Consumption expenditures50Imports40Government purchases of goods and services20Construction of new homes and apartments30Sales of existing homes and apartments40Exports50Government payments to retirees10Household purchases of durable goods20Beginning-of-year inventory10End-of-year inventory20Business fixed investment30Given the data in the table, compute the government purchases component of GDP.
A. 20
B. 30
C. 10
D. 40
Answer: A
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Uncertainty about inflation: a. shifts the attention of business managers away from exchange rate movements and toward concerns about productivity. b. reduces the difficulty of making international business decisions
c. make suppliers link the selling prices of their goods to the overall inflation rate. d. undermines money's importance as a link between the present and the future. e. makes contracts easier to negotiate.
Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force
a. Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. b. Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. c. The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. d. The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise.
Player 1 and Player 2 are playing a game in which Player 1 has the first move at A in the decision tree shown below. Once Player 1 has chosen either Up or Down, Player 2, who can see what Player 1 has chosen, must choose Up or Down at B or C. Both players know the payoffs at the end of each branch.
What is the equilibrium outcome of this game?
A. Player 1 and Player 2 both choose Down. B. Player 1 chooses Up and Player 2 chooses Down. C. Player 1 chooses Down and Player 2 chooses Up. D. Player 1 and Player 2 both choose Up.
The concept of the invisible hand was first introduced to economics by:
A. Adam Smith. B. Thomas Malthus. C. Milton Friedman. D. David Ricardo.