Which does not contribute directly to the production of the domestic output of an economy?
A. A full-time student.
B. An insurance agent.
C. A soldier.
D. A police officer.
Answer: A
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Two factories make wooden chairs. If the workers in factory A make each chair from start to finish and the workers in factory B divide labor, one would assume
A) the chairs in factory A are of higher quality. B) the workers in factory B have more job satisfaction. C) factory B can take advantage of division of labor and produce more efficiently. D) factory A can take advantage of division of labor and produce more efficiently.
A change in government purchases has the greatest effect on the economy in the short run when _____. a. the aggregate demand curve is relatively flat
b. the aggregate demand curve is relatively steep. c. the short-run aggregate supply curve is relatively flat. d. the aggregate demand curve is vertical. e. the short-run aggregate supply curve is vertical.
Suppose an economy operates at a real GDP level of $855, where saving = $400; investment = $95; government spending = $365; taxes = $130; imports = $210; exports = $170 . Which of the following statements is true in the light of the given information?
a. Aggregate expenditures will fall, because total injections exceed total leakages by $110. b. Real GDP will increase, because total injections are less than $855. c. The economy will be in equilibrium, because leakages equal injections. d. Real GDP will fall, because total leakages exceed total injections by $110. e. Inventories will rise, because planned saving exceeds planned investment.
Economic surplus is another term for which of the following?
a. efficiency b. consumer surplus c. social surplus d. deadweight loss