An example of a good or service that would not count in the U.S. GDP would be:
A. a car made by Ford in Michigan.
B. a car made by Toyota in Tennessee.
C. sneakers made by Nike in Indonesia.
D. sneakers made by New Balance in Ohio.
Answer: C
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Involuntary unemployment
A) will increase as the wage rate falls. B) exists when there is an excess quantity of labor supplied. C) occurs when the wage rate is below the equilibrium wage rate. D) exists when there is a shortage of labor.
The function that banks perform by obtaining funds from households, businesses, and governments and lending these funds to other households, businesses, and governments is known as
A) fiscal intermediation. B) financial intermediation. C) lending intermediation. D) liquidity intermediation.
Which of the following is a correct statement about production possibilities frontiers?
a. An economy can produce only on the production possibilities frontier. b. An economy can produce at any point inside or outside a production possibilities frontier. c. An economy can produce at any point on or inside the production possibilities frontier, but not outside the frontier. d. An economy can produce at any point inside the production possibilities frontier, but not on or outside the frontier.
Suppose a consumer buys pizza (P) and soft drinks (S). The price of pizza is $10, the price of soft drinks is $2 and the consumer's income is $100. If pizza is measured on the vertical axis and soft drinks are measured on the horizontal axis, then the consumer's budget constraint is given by:
A. P = 10 - (1/5)S B. S = 10 - (1/5)P C. P = 100 - 5S D. P = 10 - 5S