GDP equals the value added by producers of:
A. intermediate goods and services, as well as final goods and services.
B. intermediate goods and services only.
C. final goods and services only.
D. intermediate and final goods only.
Answer: A
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For an individual who consumes only two goods, x and y, the opportunity cost of consuming one more unit of x in terms of how much y must be given up is reflected by:
a. the individual's marginal rate of substitution. b. the market prices of x and y. c. the slope of the individual's indifference curve. d. none of the above.
Which of the following is not a weakness of fiscal policy as a tool of economic stabilization? a. It is ineffective in dealing with stagflation
b. Its correct implementation depends on an accurate estimate of potential output. c. It is subject to lags. d. It affects only aggregate demand but does not have any impact on aggregate supply. e. Households may not respond to changes they perceive as permanent.
When looking at a graph of aggregate demand, which of the following is correct?
a. There are nominal variables on both the vertical and the horizontal axes. b. There are real variables on both the vertical and horizontal axes. c. The variable on the vertical axis is nominal; the variable on the horizontal axis is real d. The variable on the vertical axis is real; the variable on the horizontal axis is nominal
Shanda is a policymaker for the government. If her goal is to increase the equilibrium quantity of loanable funds while lowering real interest rates, what type of program should she pursue?
a. help researchers create a profitable technological breakthrough b. enact an investment tax credit c. eliminate an investment tax credit d. enact a saving incentive