Compare and contrast the expenditure approach and the value-added approach to GDP.
What will be an ideal response?
With expenditure approach method, GDP is calculated by adding how much
market participants spend on final goods and services over a specific period of time.
The value-added approach measures the additional value a company gives to the final
product—the difference between what a firm sells its goods for and the price it pays for
intermediate goods. With the first method, the final value of goods and services are
added to determine GDP. With the second method, the value added by each firm during
the process of producing goods and services is used to determine GDP.
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What are the three categories of transactions in the balance of payments? Give an example of each
The rate of interest that Federal Reserve banks charge member banks is called the
What will be an ideal response?
In economics, resources are also known as
A. factories. B. human capital. C. factors of production. D. minerals.
All of the following are benefits of the Fed having only the single goal of price stability EXCEPT
A) the Fed would be more credible. B) the fed would not be distracted and led astray by other concerns. C) there would be greater reliance on fiscal policy for economic stabilization. D) the Fed would be free from political pressures.