Joe and Pam are neighbors. Joe asks Pam to drive him to the airport. Before leaving, Joe pays for Pam to fill her car's gas tank at the local gas station. Joe's trip to the airport would be ________.
A. not counted in GDP because the trip does not involve any formal market transactions
B. counted in GDP because Joe purchased the gas
C. not counted because nothing was actually produced
D. counted in GDP because Joe and Pam represent different households
Answer: B
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In the above figure, if A is the initial equilibrium point and there is an unanticipated rise in aggregate demand from AD1 to AD2, then
A) the new short-run equilibrium will be at point B. B) the new short-run equilibrium will be at point D. C) the new long-run equilibrium will be at point B. D) real Gross Domestic Product (GDP) per year will fall below Y1.
A tit for tat strategy, players __________
a. Never strikes first b. Responds immediately to cheating c. Limits the punishment to only one period d. All of the above
If a chemical factory causes noxious fumes to be emitted in the neighborhood, a third party would be:
a. workers at the factory. b. factory managers. c. chemical customers. d. local homeowners. e. owners of the factory.
Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?
a. the amount she paid to buy the new parts b. the amount she paid to buy new parts and gasoline c. the amount she paid to buy new parts, gasoline, and oil. d. the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.