Provide the formula for the expenditure approach to GDP accounting and include an example of each category of spending
GDP = C + I + G + (X M). Examples will vary.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. The price elasticity of demand for this product is
A. -67. B. -0.67. C. -0.15. D. -1.5.
What is the optimal scale of plant?
What will be an ideal response?
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower