How does GDP account for something that was produced for sale in one year and sold in the next year?
A. It is counted in the first year, and anything that happens later does not count.
B. It is counted in the second year.
C. It is counted twice.
D. It is counted as an addition to inventory (which is in business investment) in the year it was produced, and the markup is counted in the year in which it is sold.
Answer: D
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According to the Laffer curve, an increase in marginal tax rates
a. reduces total tax revenue. b. increases total tax revenue c. reduces total tax revenue when marginal tax rates rise past a certain point. d. indicates that labor supply does not respond to changes in tax rates.
The more elastic the demand for a good, the smaller the deadweight loss from the tax imposed on the good
a. True b. False Indicate whether the statement is true or false
Most doctors are employed by the government and most hospitals are owned by the government in
A) Canada. B) Japan. C) the United Kingdom. D) the United States.
Suppose there is a $200 billion increase in government spending. We know that this increase in government spending will cause which of the following to occur?
A) equilibrium real GDP will increase by exactly $200 billion. B) an increase in equilibrium real GDP and an increase in the multiplier. C) an increase in equilibrium real GDP and a reduction in the multiplier. D) an increase in equilibrium real GDP and no change in the multiplier.