GDP is the total market value of:
a. All expenditures on natural resources, labor, and capital goods in an economy in a given year
b. All intermediate goods and services produced in an economy in a given year
c. All final goods and services produced in an economy in a given year
d. All expenditures on consumption, investment, and net exports in an economy in a given year
Answer: c. All final goods and services produced in an economy in a given year
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The long run refers to a time period
A) long enough for a firm to pay all of its creditors in full. B) long enough for a firm to change the use of its variable inputs. C) long enough for a firm to vary all of its inputs, to adopt new technology, and change the size of its physical plant. D) during which a firm is able to purchase all of its inputs, including its plant and equipment.
In contrast to the earlier neoclassical models of economic growth, in endogenous growth models, there is more emphasis on
a. human capital. b. externalities. c. increasing returns to scale. d. all of the above.
The Bretton Woods System of exchange rates was established:
a. to solidify support for the then-existing gold standard. b. to peg the worldwide price of silver to the price of gold. c. in Europe before World War II to establish a flexible exchange rate regime. d. in the United States in 1944 to develop a gold exchange standard. e. by a mechanism that made gold the reserve currency of the system.
The purchasing power parity theory of exchange rate determination maintains that
a. the exchange rate between two nations' currencies is determined by the percent of gold that backs each nation's currency. b. the exchange rate between two nations' currencies adjusts to reflect differences in the price levels in the two nations. c. in the short run, exchange rates are determined by central bank intervention in the currency markets. d. the exchange rate between two currencies is determined by the debt that each nation owes to the World Bank.