National income is a measure of
A. How well the economy is doing on a gross basis.
B. The income earned by the factors of production in producing GDP.
C. The country's future productive capacity.
D. The income received by the factors of production plus depreciation.
Answer: B
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In an open economy in which only two goods are produced and possibly traded, we would find that
a. production occurs where the production possibility curve is tangent to a line with the slope equal to the ratio of the world relative prices. b. production occurs where an indifference curve is tangent to the production possibilities curve. c. consumption occurs where an indifference curve is tangent to the production possibilities curve. d. consumption occurs where the production possibilities curve is tangent to a line with a slope equal to the ratio of the world relative prices.
Relative to the Keynesians, the supply-side economists
a. place more emphasis on the importance on the level of investment than on the level of income. b. place more emphasis on the after-tax rate of return as a determinant of investment. c. are more concerned with government budget deficits. d. All of the above
As a general rule, free trade:
A. increases the supply of factors of production that are domestically abundant. B. increases demand for factors of production that are domestically abundant. C. decreases the supply of factors of production that are domestically scarce. D. decreases the demand for factors of production that are domestically abundant.
The intersection of the aggregate demand and the aggregate supply curve defines the equilibrium level of _____ and the price level
a. real interest rate b. nominal interest rate c. nominal GDP d. real GDP e. unemployment