The largest component of U.S. GDP is:
A.) Government services at the federal, state and local levels combined.
B.) Business investment.
C.) Household consumption.
D.) Net exports.
C.) Household consumption.
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Sustainable development implies that succeeding generations preserve the value of
a. natural capital b. physical investment c. all natural resources d. human capital e. none of the above
Which of the following is not an example of a principal trying to solve the moral-hazard problem? The principal
a. calls the agent's references. b. installs hidden cameras to monitor the agent's behavior. c. pays the agent efficiency wages. d. pays the agent a year-end bonus.
Programs that reduce the incentive to work make income redistribution inefficient.
Answer the following statement true (T) or false (F)
Suppose that there is no government and no international trade. When C + I is less than the level of real GDP
A. unplanned inventories decrease, and real GDP expands. B. unplanned inventories equal zero, and there is no change in the level of real GDP. C. unplanned inventories increase, and real GDP contracts. D. real planned investment spending equals real planned saving.