Because government services are not sold in markets,
A. taxes are used to value their contribution.
B. the government tries to estimate their market value and uses this to measure the government's contribution to GDP.
C. they are valued at their cost of production.
D. they are excluded from measurements of GDP.
Answer: C
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Indicate whether the statement is true or false
Which of the following statements is true about a simple circular flow model?
A) Producers are buyers in the factors market. B) Producers are neither buyers nor sellers in the product market. C) Households are neither buyers nor sellers in the input market. D) Households are sellers in the product market.
If the federal government borrows to build a new dam in North Dakota with a rate of return above the borrowing rate, and later raises federal income taxes to pay the interest, future welfare in the United States is
A) redistributed and lowered overall. B) redistributed but not lowered overall. C) not redistributed but lowered overall. D) not redistributed and not lowered overall.
If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports
a. increase which shifts aggregate demand right. b. increase which shifts aggregate demand left. c. decrease which shifts aggregate demand right. d. decrease which shifts aggregate demand left.