The value added of a producer is the
A. value of its total sales once externalities are accounted for.
B. total amount for which all its products sell minus its change in inventories.
C. quality-adjusted amount of its total sales less any commissions paid.
D. value of its output minus the value of the inputs it purchases from other producers.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
One of the main reasons behind hyperinflation episodes is:
A) a decrease in real GDP. B) large government budget deficits. C) high tax rates. D) a decrease in the demand for consumer goods.
Which of the following is TRUE?
A) When a market price allocates resources, everyone who is able to pay the price gets the resource. B) A command system works well when the lines of authority and responsibility are clear. C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by command. D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a market price.
A proportional tax is one in which the fraction of income paid in taxes rises as a person's income increases
a. True b. False Indicate whether the statement is true or false