If intermediate goods and services were included in GDP:
A. the GDP would be overstated.
B. the GDP would then have to be deflated for changes in the price level.
C. nominal GDP would exceed real GDP.
D. the GDP would be understated.
Answer: A
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Which of the following is likely to cause the supply curve for steel window frames to shift to the right?
A) A decrease in the cost of production of steel due to a new subsidy B) A fall in the number of steel window frame producers due to factory lockouts C) A rise in the market price of steel window frames due to an increase in demand D) An increase in the wages of labor working in steel firms due to demands by trade unions
According to classical economists, inflation occurs when the annual rate of growth in the money supply
a. exceeds the annual rate of growth of full-employment real GDP b. equals the annual rate of growth of full-employment real GDP c. exceeds the annual rate of growth of money velocity d. is less than the annual rate of growth of money velocity e. is less than the annual rate of growth of full-employment nominal GDP
How would the imposition of tariffs on imported leather boots be likely to affect domestic boot manufacturers?
a. Foreign competition would increase. b. Prices for domestic boots will be lower. c. Boot prices will rise and sales increase. d. Imports will outsell domestic boots.
Answer the following questions true (T) or false (F)
1. Monopolistic competition differs from oligopoly in that in monopolistic competition firms act independently while in oligopoly firms act interdependently. 2. An entry barrier exists when firms in an industry charge the lowest price possible for their products. 3. If economies of scale are significant, the typical firm will not reach the minimum point on its long-run average cost curve until it has produced a large fraction of industry sales.