At the end of the year, Ford realizes it has overproduced Fiestas, because 2,500 of them are left unsold. How is this accounted for in that year's GDP? The cars are:
A. considered durable goods, and their value will increase consumption.
B. considered inventory and their value will increase investment.
C. not counted until they are sold in next year's GDP.
D. considered a bad thing and reduce the value of investment.
Answer: B
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Firms buy new capital goods only if they expect this investment to yield:
a. a higher return than other possible uses of their funds. b. the same return as other possible uses of their funds. c. no return as compared to other uses of their funds. d. a lower return than other possible uses of their funds.
The population of Potentia doubled within 20 years while its income per capita remained unchanged during the same period of time. This implies that ________
A) its price level doubled B) its gross domestic product also doubled C) its price level halved D) its gross domestic product remained constant
If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?
a. The expenditure schedule will shift upward. b. The expenditure schedule will shift downward. c. The expenditure schedule will become flatter. d. The expenditure schedule will become steeper.
Many states in the U.S. acquire significant amounts of funds from the following, except
A. personal income taxes. B. grants from the Federal government. C. property taxes. D. state-run lotteries.