The largest component
A. Of GDP is government purchases.
B. Of GDP is investment.
C. Of C is nondurable goods.
D. Of C is services.
D. Of C is services.
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There are three goods you are interested in purchasing, X, Y, and Z. You notice that the price of Z has fallen. Given that the cross elasticity between Z and Y is –1.5 and the cross price elasticity between Y and X is 3.0, it would make sense that
a. Y and X are substitutes; X and Z are substitutes b. Z and X are complements; Y and X are substitutes c. Y and X are substitutes; Y is complementary to Z d. X and Z are unrelated; Y is complementary to X e. X and Z are complements; Y and Z are substitutes
Under a gold standard in which France defined one franc to be worth 1/50th of an ounce of gold and the U.S. defined one dollar to be worth 1/10th of an ounce of gold, then
A. one U.S. dollar would exchange for five French francs. B. the French franc is worth only one-tenth as much as the dollar is worth. C. the U.S. dollar is valued at one-fifth of the French franc. D. on French franc would exchange for ten dollars.
The Okun's law shows the relationship between
A) inflation and unemployment rate. B) output growth and unemployment. C) inflation and output growth. D) output growth and money supply.
Keynesian economics predicts that if government policy makers deem current equilibrium real Gross Domestic Product (GDP) to be "too low," then an appropriate policy action would be to
A. raise government spending, thereby increasing aggregate demand and pushing up real Gross Domestic Product (GDP) with little or no inflationary consequences. B. reduce the money stock, thereby causing aggregate demand to decrease and inducing a rise in fall in the price level that generates an increase in total planned expenditures. C. do nothing, because the economy is self-adjusting. D. increase taxes, thereby causing aggregate demand to increase and inducing a rise in real Gross Domestic Product (GDP) with little or no inflationary consequences.