U.S. exports are
a. not included in U.S. GDP because they are consumed abroad
b. included in U.S. GDP because they are produced domestically
c. included in U.S. GDP because they represent an increase in inventories
d. included in U.S. GDP as government purchases because the government decides what goods may be exported
e. not included in U.S. GDP because they are not subject to a tariff
B
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According to the new classical model, the output cost of reducing inflation
a. is the costs of the revenue lost by printing less money. b. is the lost income from the large recession that will occur as aggregate demand falls. c. may be small if the policy to reduce inflation is seen as credible by the public. d. will be zero if it is unanticipated.
Economists use the term "marginal" to describe costs and benefits
a. that are minimal and hardly worth noting. b. that are incremental and thus relevant to decision making. c. that are noteworthy but not the most important. d. whose importance can be minimized through hard work. e. none of the above.
The primary difference between commodity money and fiat money is that
a. commodity money is a medium of exchange but fiat money is not. b. fiat money is a medium of exchange but commodity money is not. c. commodity money has intrinsic value but fiat money does not. d. fiat money has intrinsic value but commodity money does not.
Answer the following questions true (T) or false (F)
1. The income effect results in consumers increasing the quantity of normal goods demanded when the price falls. 2. The demand curve for a Giffen good slopes upward. 3. The only Giffen goods that have been identified so far in the real world are luxury goods.