Which of the following would be counted as a final good for inclusion in GDP?
a. A piece of glass bought this year by a consumer to fix a broken window.
b. A sheet of glass produced this year by Ford for windows in a new car.
c. A tire produced this year and sold to a car maker for a new car sold this year.
d. None of these would be counted in GDP.
a
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Why do some utilities have an incentive to exaggerate their costs of production?
What will be an ideal response?
A technological advance that increases labor productivity will:
a. lower wages. b. decrease the demand for labor as fewer workers are needed. c. decrease the supply of labor as fewer workers are needed. d. increase the demand for labor as MP rises. e. decrease the demand for labor as MP falls.
A decrease in the money supply might indicate that the Fed had
a. purchased bonds in an attempt to increase the federal funds rate. b. purchased bonds in an attempt to reduce the federal funds rate. c. sold bonds in an attempt to increase the federal funds rate. d. sold bonds in an attempt to reduce the federal funds rate.
Refer to the above figure. If the relevant aggregate demand curve is AD2, what is the current economic situation?
A. overemployment B. inflationary gap C. recessionary gap D. equilibrium