Which of the following transactions would represent an addition to a nation's current gross domestic product?
A. Ms. Smith purchases a share of stock in an automobile company.
B. A retailer increases her stock of imported shoes.
C. The government increases its domestic purchases of food for use by the military.
D. A corporation sells shoes from last year's inventory.
E. A mother sells her car to her daughter.
Ans: C. The government increases its domestic purchases of food for use by the military.
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Use the following graph showing the domestic demand and supply curves for a specific product in a hypothetical nation called Marketopia to answer the next question.
At what price will Marketopia be neither importing nor exporting the product?
A. $2.50 B. $1.00 C. $1.50 D. $2.00
Need-based spending ________ during an expansion and ________ during a recession, which leads to larger budget deficits during the ________ phase of the business cycle
A) increases; decreases; recession B) decreases; increases; expansion C) decreases; increases; recession D) decreases; decreases; expansion E) increases; decreases; expansion
If the prices would have been much higher ten years ago for the items the average consumer purchased last month, then one can likely conclude that
A) the aggregate price level has declined during this ten-year period. B) the average inflation rate for this ten-year period has been positive. C) the average rate of money growth for this ten-year period has been positive. D) the aggregate price level has risen during this ten-year period.
A price floor set below the equilibrium price will result in a surplus
a. True b. False