Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and
imports of goods and services from foreigners is $1.5 million. Calculate this nation's GDP.
The nation's GDP equals the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services, where net exports of goods and services equals of goods and services exports minus imports of goods and services. So, GDP = $15 million + $2 million + $1 million + $1 million - $1.5 million = $17.5 million.
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Use the following table to answer the next question.YearNominal GDPReal GDPPrice Index15,2004,800--25,500--11235,7505,000--What was real GDP in year 2?
A. $5,320 billion B. $4,911 billion C. $4,820 billion D. $4,875 billion
Which of the following is an example of product differentiation based on the intangible aspects of a product?
a. An electronic company advertising its new range of slim smartphones b. A consumer durables company advertising its number of years of operation c. A car mechanic opening his new workshop near a busy highway d. An electronic company offering a warranty of 2 years for its air conditioners
Suppose Joe's MRS for cookies with crackers is 6 crackers per cookie. Also assume that Mary's MRS for cookies with crackers is 3 crackers per cookie. Assuming that these rates of substitution don't depend on the amounts consumed, which of the following trades would make both Joe and Mary better off?
A. Joe gives Mary 5 crackers in exchange for a cookie. B. Joe gives Mary 2 crackers in exchange for a cookie. C. Joe gives Mary 6 crackers in exchange for a cookie. D. There is not enough information to answer the question.
Figure 5-1
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Figure 5-1 plots potential and real output for a hypothetical economy. Based on this graph, the recession occurred
A. between years 1 and 2. B. between years 2 and 3. C. between years 3 and 4. D. after year 4.