If an economy produces 100 pencils valued at $0.25 each and 500 sheets of ruled paper at $0.01 each, using GDP as the measure of output:
A. ruled paper is weighted as being 5 times more important than pencils.
B. pencils are weighted as being 5 times more important than ruled paper.
C. pencils are weighted as being 25 times more important than ruled paper.
D. ruled paper is weighted as being 25 times more important than pencils.
Answer: C
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Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same. c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).
Applying economic principles to the analysis of political decision making is political economy.
A. True B. False C. Uncertain
Which of the following is an example of a progressive tax?
A. Social Security payroll tax. B. The federal income tax. C. An excise tax. D. A local sales tax.
If you owned a small farm, which of the following would be a fixed cost?
A. Harvest labor B. Seed C. Hail insurance D. Fertilizer